Streamlined SMART On The Way

Under the current version, a carrier would have to be examined every three years, with the home-state regulator serving as lead examiner. But the home-state regulator would be required to allow regulators in other states where the carrier does business to participate.

Several lobbyists familiar with the redraft said they believed the current draft of the streamlined bill is likely to undergo extensive changes before being introduced.

Reacting to the bill, Charles E. Symington Jr., senior vice president for government affairs and federal relations for the Independent Insurance Agents and Brokers of America, said, “The IIABA is a strong supporter of the SMART concept, which Chairmen Oxley and Baker have been working on for the past year. We will continue to support the chairmen if they decide to move forward with the bill this year.”

A harder line was taken by a recently formed group called Agents for Change, which consists primarily of life agents.

“Moving to jump-start the SMART bill and streamline it proves what we have known from the beginning–this policy proposal is fatally flawed,” said Peter Ludgin, newly appointed executive director for Agents for Change.

“Insurance agents and brokers want the option of being regulated by the states or the federal government,” Ludgin said. “It is as simple as that. This is about efficiency, speed to market, servicing customers across state lines, licensing hassles, competition in the marketplace, and, ultimately, what is best for the consumer.

“Customers should not have to forgo their current relationships and seek a new insurance agent every time they move or open a business across state lines,” Ludgin said. “Once our friends in the House understand that insurance producers are tired of jumping through hoops to service their constituents we are confident that they will see the light and support an optional federal charter. In the 21st century there is simply no excuse to not offer an option.”

The American Council of Life Insurers was not available for comment. But, a lobbyist for a life insurance carrier, who declined to be named but whose company has supported SMART since its inception several years ago, said, “It is going to be much more difficult to get us to support this bill today, even though it is being advertised as a more streamlined approach.”

The lobbyist added, “We’re questioning whether it is in our best interest to have Rep. Baker introduce this bill in the hope that we can convince him to support the OFC next year, when Rep. Oxley is no longer in the picture.”

Significantly, this lobbyist said that supporting SMART in the past as a means of keeping regulatory reform going was successful. That’s because, the lobbyist said, it prodded the National Association of Insurance Commissioners to create the interstate compact. Currently, 23 states have signed on, the lobbyist said, “and we anticipate that the trigger level of 26 states will be reached within several months.

“That means,” the lobbyist said, “that the interstate compact will go into effect sometime next year, and we support that as an interim step.” But, the lobbyist added, the life industry’s current position is that “if Rep. Oxley is out of the way, we have a shot at convincing the incoming House Financial Services Committee leadership to support the OFC.”