A top life insurance executive pleaded Wednesday for Congress to give the industry a choice between state regulation and regulation by a new federal agency.
Life insurers have a unique ability to create new products that can help consumers convert retirement savings into lifetime income streams, Christopher Condron testified here on behalf of the American Council of Life Insurers, Washington, at a hearing on insurance regulatory reform organized by the House Financial Services Committee subcommittee that oversees insurance.
“The most important thing that you can do to stimulate further breakthrough innovation from the life insurance industry is to address the regulatory barriers that so frustrate innovation,” said Condron, who is chairman of AXA Equitable Life Insurance Company, New York, a unit of AXA S.A., Paris.
“To encourage innovation it is important for there to be uniform standards, consistently applied and efficiently administered, with a minimum of duplication or redundancy,” Condron said. “The current state regulatory system meets none of these criteria.”
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Condron argued that creating a federal charter option would make it easier for Congress to address issues such as data security and travel underwriting.
Even when the life industry itself takes the lead in efforts to protect consumers and regulators, like what the industry is doing, the industry still has a hard time getting anything done quickly, Condron said.
The industry has developed annuity disclosure templates, for example, but “we can only implement this beneficial disclosure by going to each state and working through their individual regulatory process,” Condron said.
Getting all states to use the disclosure templates may be impossible, and working with the states that will adopt the templates could take years, Condron said.
Walter Bell, Alabama insurance commissioner and president of the National Association of Insurance Commissioners, Kansas City, Mo., defended the NAIC’s reform efforts, noting that members’ markets “typically dwarf” the insurance markets in many European countries.
Pennsylvania, for example, has the 12th largest insurance market in the world, and its market is still larger than that of China, Bell told Kanjorski.