State regulation of insurance should continue because regulators help consumers, according to officials at the National Association of Insurance Commissioners.
“We have a good story to tell,” Sandy Praeger, a Kansas insurance commissioner and president of the NAIC, Kansas City, Mo., said here Saturday at a session at the NAIC’s spring meeting.
If the U.S. Treasury Department goes ahead with plans to recommend the idea of giving insurers and producers a choice between state regulation and federal regulation, “we will emphasize the importance of a state-based system, particularly to consumers.” Praeger said.
Praeger cited the NAIC’s “Get Smart About Insurance” consumer education initiative as an example of state regulators’ commitment to protecting consumers.
Praeger was reacting to the early release of a Treasury Department financial services regulation report summary that calls for Congress to create an Office of National Insurance and eventually to put all forms of financial services market conduct under the jurisdiction of a single agency.
Treasury Secretary Henry Paulson is set to unveil the report Monday, but the Associated Press and the New York Times already have published a draft of the executive summary.
Praeger and Kevin McCarty, the Florida insurance commissioner and host commissioner of the NAIC’s spring meeting, talked during the meeting’s opening session about the successes of a variety of state-based regulatory initiatives, such as the System for Electronic Rate and Form Filing, producer licensing streamlining efforts, senior product sales suitability efforts and the Interstate Insurance Product Regulation Commission.
Praeger and McCarty also warned of the dangers of expanding the federal bureaucracy.
Those who want federal regulation “better be careful because they may get what they asked for,” McMarty said.
Another recurring topic here has been the need for the NAIC to work together with state legislators.
“We need to singing off of the same page,” Praeger told representatives of the National Conference of Insurance Legislators, Troy, N.Y.
Insurance regulators and state lawmakers should work together to keep the federal government from establishing a new federal producer licensing organization, according to Roger Sevigny, the New Hampshire commissioner and NAIC president-elect.
Rhode Island state Rep. Brian Kennedy, D-Hopkinton, R.I., NCOIL’s president, said insurance regulators should be reaching out to NCOIL members.
“When you’re going to Washington, it is important to have us with you,” Kennedy said. “We do speak the language.”
Kennedy downplayed the importance of the Treasury Department regulation report.
State lawmakers were not given any chance to influence the development of the report, Kennedy noted.
In any case, “I can’t imagine that between now and Jan. 1, 2009, there will be too much discussion about an optional federal charter,” Kennedy said.