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September 14, 2005 at 08:00 PM
Making The Case
Now that the dust, or perhaps more aptly, the water line, is beginning to settle in the aftermath of Hurricanes Katrina and Rita, the question that floats to the surface is “Feds or states?”
It is a question the insurance community has been tackling for years now and its drumbeat resounds at quarterly meetings of the National Association of Insurance Commissioners. Much of the activity at the NAIC is focused on proving that state regulation is both effective and relevant.
Indeed, that drumbeat and accompanying dance would no doubt have been heard in New Orleans if Katrina’s roar hadn’t wiped away the NAIC’s fall meeting scheduled for the following week in Crescent City along with everything else in its path.
Part of that drumbeat has been a repeated call for state regulators to focus on their strengths and avoid a regulatory race to the bottom. How? Well, through action; no, make that quick action, on everything from market conduct reform to speed-to-market initiatives.
It is only through strength and through leadership that a case for state regulation will be made, regulators are told.
Well, the case was made and then some with the response of individual state insurance departments and the NAIC in the days after the storm.
Team Katrina–embodied in the commissioners and staffs of the Louisiana, Mississippi, Alabama, Georgia, Florida and Texas insurance departments–went into action, initiating everything from a summit to work with insurers on assessing damage and paying life and property-casualty claims to setting up help tables at shelters to facilitate contact with refugees’ insurers.
Advice from both New York and Florida, which respectively experienced 9/11 and a wallop from 4 hurricanes in one season, provided valuable insight from institutional memory. New York, in turn, had received advice from lessons learned by the Oklahoma department after the Oklahoma terrorist bombing. That institutional memory proved a kind of lifeline as well as timeline regulators could use.
The NAIC, for its part, created an emergency responder database of state resources. That complemented state resources on individual state insurance department Web sites.
