The National Conference of Insurance Legislators has officially come out against proposed federal insurance regulatory reform legislation.[@@]
NCOIL President Steve Geller, a Democratic member of the Florida Senate, sent a letter opposing the State Modernization and Regulatory Transparency Act proposal to key U.S. House members in September.
The NCOIL executive committee formally endorsed Geller’s initiative here Saturday at NCOIL’s annual meeting.
The move seems to put NCOIL at odds with the National Association of Insurance Commissioners, Kansas City, Mo., which continues to work with the U.S. House Financial Services Committee on drafting legislation based on the SMART Act proposal.
For the first half of the year, NCOIL and the NAIC worked closely together on projects such as market conduct model legislation, to impress federal lawmakers with their seriousness about creating uniform regulation.
Geller said the initial efforts at cooperation were aimed at getting a “place at the so-called mythical table.”
“But at some point you have to draw a line in the sand,” he said. “Because as legislators we all know that if we continue to take part in the process then, in the end, we will have to support its outcome.”
The initial draft of the SMART Act that came out late last summer infuriated state lawmakers, who felt that it stripped them of their powers and gave those powers to federal bureaucrats, state bureaucrats and the NAIC.
“There has been some concern that, from the NAIC perspective, a lot of its support has been staff driven, because they see a greater role for themselves in the process,” Geller said. “I really don’t think the NAIC has been well-served by its staff.”
Geller said NCOIL opposition stemmed from the measure’s rate and form deregulation, the presence of a federal regulator and federalized agent licensing. Geller said he believes the measures would lead to a “race to the bottom” in terms of regulatory standards.
At a forum before the executive committee meeting, consumer and industry representatives clashed over the impact of the federal standards legislation.
Robert Hunter, insurance director for the Consumer Federation of America, Washington, has often found himself at odds with NCOIL. But on Saturday he struck a chord with the legislators.
The SMART Act “is great for the NAIC, this is great for the regulators,” he said. “But it leaves the state legislators totally out of the mix.”
Dave Bates, a Republican member of the Rhode Island Senate, expressed the only qualms about NCOIL’s action. He said he feared that the alternative, optional federal charter legislation, would be much worse than what is currently under discussion.
But all parties agreed that House passage of any such implementation measure was at least a year off, and Senate passage even further down the road.