State lawmakers want to talk about how much better the states have been doing at regulating financial services companies than federal agencies have been.
Members of the National Conference of Insurance Legislators, Troy, N.Y., discussed the importance of protecting state insurance regulatory oversight this weekend at their annual meeting in Duck Key, Fla., according to NCOIL President Sen. James Seward.
Some fear that “Washington may look at the financial meltdown in a kneejerk way [and] push for federal regulation,” says Seward, who represents Oneonta, N.Y., in the New York state Senate.
“We are very proud of the fact that insurance companies are weathering this, and that those entities under state insurance regulation are coming through this [crisis] much better than those entities that are federally regulated,” Seward says.
The federal government “totally dropped the ball” when it came to regulating credit default swaps and other products and markets involved in the financial crisis, says Kentucky state Rep. Robert Damron, D-Nicholasville, Ky., the NCOIL vice president.
Susan Voss, the Iowa insurance commissioner and the secretary-treasurer at the National Association of Insurance Commissioners, Kansas City, Mo., talked at the meeting about efforts to keep the U.S. Securities and Exchange Commission from classifying indexed annuities as securities and possibly taking over regulation of indexed annuities.
Indexed annuities are insurance products, Voss told NCOIL meeting participants.
Voss said at the meeting that the NAIC is working on suitability and disclosure models that will improve the work the states already are doing to oversee the indexed annuity market.
Also at the annual meeting, state insurance legislators agreed that NCOIL will send the NAIC a letter asking the NAIC to stop indicating that NCOIL supports the NAIC’s life settlement model law.
The NAIC model includes some provisions that NCOIL members rejected and does not have the endorsement of NCOIL, Damron says.