There was an interesting tidbit tucked away in Arthur Postal’s story in last week’s issue on the prospects for modernization/reform/overhaul (take your pick) of state insurance regulation.
Covering the Third Annual Insurance Summit in D.C., Postal reported that although legislation to modernize the state regulatory system would be introduced this spring in both the House and Senate, prospects for passage were considered slim.
This modernization includes within its purview something dearly desired by a large and influential segment of the life insurance business–namely, an optional federal charter.
Problem is there are other large and influential segments of the business that are–to put it mildly–less enamored of the OFC than is the American Council of Life Insurers, the American Bankers Insurance Association or certain large life insurers.
One of these segments with no little influence is the National Association of Insurance Commissioners, which apparently has dug in its heels over any kind of federal involvement in a turf that has been its own for more than 100 years.
And this is where that interesting little tidbit I mentioned above comes in. Here is what Postal wrote:
“Moreover, J. Kevin McKechnie, associate director of government relations for the American Bankers Insurance Association, which is spearheading the effort for legislation creating an optional federal charter, raised another issue. Questioning Iuppa, McKechnie contended that state regulators had increased the rate of market conduct examinations for insurers whose officials had testified on the issue before Congress. Iuppa denied there had been retaliation, although he did not reject the allegation out of hand but did ‘commit’ himself on behalf of the NAIC to a policy of no retaliation against insurers for supporting federal regulation.”
Iuppa, as you probably know, is Al Iuppa, Maine insurance superintendent and current president of the NAIC.