Last month we talked with Sandy Praeger, president of the National Association of Insurance Commissioners (NAIC) about changes suggested for the insurance industry within the Blueprint released by the Department of the Treasury back in March. (For more on the Blueprint got to www.ustreas.gov/offices/domestic-finance/regulatory-blueprint.) Not surprisingly, Praeger was critical. The suggested modifications, she said, would cause more problems than they would solve, and impair the effectiveness of current regulation and consumer protections.
You might think the insurance industry would be united on the opposite side, jumping up and down and cheering for the proposed Optional Federal Charter (OFC) and all the rest. Not so, however. While some segments of the industry are very pleased, others are just as opposed as NAIC, if not for the same reasons.
American Council of Life Insurers (ACLI)
ACLI’s Jack Dolan says that his group is, of course, very much in favor of the OFC; in fact, it was one of its earliest supporters. Why? To ACLI, the OFC represents “modernization of insurance regulation, which is sorely needed.” Dolan points out that insurance regulation originated “with the concept that all insurance was local, and of course that’s no longer the case.” Citing “serious and global” challenges facing the life insurance industry, Dolan says that a federal presence in regulation is needed. Among other things, he says the life insurance industry needs to “have a seat at the table” when public policy decisions are made, dismissing the possibility that that seat might be adequately filled either by ACLI or NAIC–”neither one is congressionally authorized, and we’re both just trade organizations”–and pointing out the fact that states have a “constitutional inability . . . to enter into regulatory agreements with their international counterparts.”
National Association of Mutual Insurance Companies (NAMIC)