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Regulators’ Own “War of The Worlds”
On the threshold of the big summer movie release, “War of the Worlds,” insurance regulators may well wonder if they have their own siege underway.
Is a flaming object catapulted from Washington and aimed at Kansas City threatening to destroy the insurance regulatory world as we know it?
The issue of the State Modernization and Regulatory Transparency Act received discussion among commissioners during the recent summer meeting of the National Association of Insurance Commissioners, Kansas City, Mo. By one account the Commissioners Roundtable session included “a lively discussion” on the issue. The regulatory strategy session preceded a Congressional hearing on June 16 on SMART and the effectiveness of state insurance regulation.
But before regulators, insurers and the consumers who buy insurance lace up their running shoes or pack their kids in their cars and take flight in panic, they might want to consider what they are witnessing. Are they seeing a Martian invasion or more precisely a series of fundamental shifts in the industry that presage change rather than doom.
High priority issues discussed during the summer NAIC meeting suggest fundamental change in the way the business is viewed.
And rather than portending calamity, issues including a principle-based approach for reserving and risk-based capital may offer tremendous opportunity if executed properly. The dialogue is taking place both in discussions of reserving for universal life products with secondary guarantees and for the development of a project, the C3-Phase II effort.