State insurance commissioners were uniformly negative in their reaction to the Treasury Department’s sweeping proposal that calls for an optional federal charter and a national insurance office.
Treasury’s proposal was not officially released until the spring meeting here of the National Association of Insurance Commissioners was almost over, but various news organizations released details while the meeting was in progress.
During the latter part of the plenary session at NAIC’s meeting, commissioners and attendees watched a televised debate over the report on CNBC over the U.S. Treasury Department’s ‘Blueprint for Financial Regulatory Reform.’ The debate included Sandy Praeger, NAIC president and Kansas insurance commissioner, as well as Marc Racicot, president of the American Insurance Association, Washington, and former Montana governor. See Document Link.
At sessions during the meeting, the ability to help consumers was a theme taken up by Praeger. “We have a good story to tell,” she said.
She said NAIC leadership would “emphasize the importance of a state-based system, particularly to consumers.” Praeger noted, among other consumer initiatives, the “Get Smart About Insurance” program developed by the NAIC.
During the opening session both Praeger and host commissioner, Kevin McCarty, emphasized successes of state-based regulation including producer licensing streamlining, SERFF, suitability of product sales for seniors and the Interstate Insurance Product Regulation Commission. In comments before attendees, McCarty cautioned that those who want federal regulation “better be careful because they may get what they asked for.” Both emphasized the dangers of a bureaucracy.
Praeger told legislators represented by the National Conference of Insurance Legislators, Troy, N.Y., that “we need to be singing off of the same page.”
According to Roger Sevigny, NAIC President-elect and New Hampshire insurance commissioner, there is good reason for the two organizations to work together. He noted a proposal coming out of Washington he described as “NARAB II,” a new version of the National Association of Registered Agents and Brokers, which would be more like a self-regulated organization than a state regulatory body. The government board created under the proposal, he said, would be made up of 4 state regulators and 5 industry representatives. The original NARAB was a body that would have been established under the Gramm-Leach-Bliley Act if state insurance regulators did not establish more uniform producer licensing.
Sevigny said that further work needs to be done on making producer licensing more efficient as detailed by a detailed report that the NAIC had released earlier this year. He said legislators could help state regulators by working together to get laws passed.
Working together by visiting members of Congress was an issue raised by state Rep. Brian Kennedy, D-Hopkinton, R.I. “When you’re going to Washington, it is important to have us with you. We do speak the language.”
When asked about the Treasury report, Kennedy said that “I can’t imagine that between now and Jan. 1, 2009 that there will be too much discussion on an optional federal charter.” He called the report “biased,” noting that state legislators had not received the report or had any input into it prior to its development.
Following the television segment, Iowa Insurance Commissioner Susan Voss said she has sent a letter to all 150 Iowa state legislators about the report and the issue. The report is a “stepping stone” to discuss the issue of state insurance regulation, she says. “Nobody is talking about the consumer,” she notes. When there is a problem, Voss asked whether consumers will call 1-800-Washington, D.C.