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Regulation and Compliance > State Regulation

Look Forward, And Quickly

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The periodic skirmishes between regulators and legislators of the National Association of Insurance Commissioners and the National Conference of Insurance Legislators are right up there with the long running feud between the Hatfields and McCoys.

Or maybe in keeping with more current rivalries and the opening of “The Dark Knight,” the Batman and Joker (you decide which one you want to be.)

In fact, during a very frank and hopefully productive dialogue session at the summer NCOIL meeting, the history was detailed by Florida state Sen. Steven Geller, D-Hallendale, and former president of the Troy, N.Y.-based organization. Geller recounts how both groups have had a changeable relationship, sometimes working in harmony but often at odds. The ride has been a little bumpy at times.

Geller recalled how many NCOIL members would think that they were working with the NAIC only to have what they thought was agreed upon ignored at a later date.

West Viriginia Insurance Commissioner Jane Cline, currently NAIC vice president, did not recount the NAIC’s version of how the 2 entities have interacted. However, she noted that the large panel of commissioners present at the meeting was a good indicator that the organization, based in Kansas City, Mo., is looking forward and continues to be serious about working with state legislators.

It is a good thing for both groups, given the current climate for change now being exhibited in Washington.

Looking back is great because it provides the continuity needed to understand each other and ourselves and where we were right and where we could have bended a little, or in some cases, a lot.

One wonders whether turf issues will matter much if the turf up for grabs is in sight of a white dome and not gold ones.

Looking ahead is even better. And for those who are serious about continued state regulation of insurance, absolutely critical.

While the common wisdom is that in an election year, it is not likely that either an Office of Insurance Information or an Optional Federal Charter will become law, there is one truth that remains.

A threshold has been passed. What was once more of a hypothetical argument is now considered a real possibility. By some, it is considered an eventuality, although that may be premature.

What will help forge more cooperation and collaboration is clarity.

The NAIC needs to be clear that it still supports state regulation.

Sandy Praeger, NAIC president and Kansas insurance commissioner tried to offer that clarity when she told legislators that NAIC is opposed to “unnecessary federal expansion. We have good, efficient state regulation. We do think that an OFC could lead to regulatory arbitrage and a race to the bottom.”

However, she continued, regulatory modernization without losing consumer protections does have a place.

She added that the OII bill really just clarifies and narrows authority over international law already vested with the federal government, and could actually protect state authority.

Unfortunately, there are those who will not parse the difference between opposition to an OFC and conditional support for an OII. They will view an OII as an OFC on training wheels.

NCOIL needs to be clear that it will not let the anger that was obviously evident during the joint dialogue session choke what could be a very productive and really crucial offensive in efforts to maintain state authority.

It seems that several legislators who spoke including George Keiser, R-Bismarck, N.D, are ready to take that step. Keiser said “I hope in the future that we can work as partners. No one is well served by fighting.”

And, both groups could pay more heed to consumer representatives because consumers are their ultimate constituents. They are the ones that will benefit from an end to the bickering.


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