State insurance commissioners are objecting to a Bush administration proposal to give insurers and producers the option to choose to be regulated by a federal agency.
The U.S. Treasury Department’s included the proposal in its new Blueprint for Financial Regulatory Reform.
Sandy Praeger, president of the National Association of Insurance Commissioners, Kansas City, Mo., and Kansas commissioner, appeared on a televised debate on CNBC that also included Marc Racicot, president of the American Insurance Association, Washington, a former Montana governor.
Commissioners watched the debate here during a session at their annual meeting.
Susan Voss, the Iowa commissioner, said after watching the CNBC segment that she has sent a letter to all 150 Iowa state legislators about the blueprint report and the “optional federal charter” issue.
The blueprint is a “stepping stone” for discussions about state insurance regulation, Voss said.
But “nobody is talking about the consumer,” Voss said.
Voss asked whether consumers with a problem would rather call an in-state number of 1-800-Washington, D.C.
If constituents call state legislators for help with insurance concerns, the legislators will have to tell them, “Talk to your congressman,” Voss said.
Joel Ario, Pennsylvania insurance commissioner, said the recent financial services regulations problems have been the result of problems with federal regulation, not state regulation.
“To drag the state system into the federal system makes no sense,” Ario said.
Mary Jo Hudson, Ohio insurance director, called the blueprint report “a red herring to hide the failings of the federal system.”
Establishing a second insurance regulatory system “will result in a race to the bottom,” Hudson predicted.