The Oval Office isn’t the only place with a new occupant. The National Association of Insurance Commissioners (NAIC) is under the command of a new president, Roger Sevigny, who is also the New Hampshire insurance commissioner.
Plans call for a continuation of the initiatives already begun by NAIC, says Sevigny, including plans to transition NAIC headquarters from Kansas City to Washington, D.C. Support functions will remain in Kansas City, but the CEO will also move to Washington, says Sevigny. Currently NAIC is concerned with hiring a new CEO, on which he says they’re “making very good progress.”
Sevigny says that while NAIC believes that state regulation of insurance is of paramount importance, and provides the best consumer protection available, “we also as a membership recognize that there needs to be much closer interaction, not only with Congress, but with other functional regulators in other financial sectors” such as the SEC and the Fed, among others.
“Certainly our support for Congressman Kanjorski’s Office of Insurance Information last fall was evidence that we believe Congress needed access to better, more immediate information regarding the world of insurance,” Sevigny adds.
NAIC is also concerned with what a federal systemic risk regulator might look like. “We’ve all seen and heard that in all likelihood we’re going to see an effort made to develop a federal systemic risk regulator,” Sevigny explains, and says that NAIC wants to make sure that if such a regulator is developed, state regulators are part of the development process.
NAIC’s focus on maintaining state regulation doesn’t mean that it isn’t looking at ways to make things easier, however. Sevigny points out that NAIC believes that there are parts of insurance regulation that lend themselves to uniformity–as an example, he cites producer licensing, for which he says NAIC has already worked on developing some standards; work will continue, he says, on getting those standards adopted on a state-by-state basis.
NAIC also supported another Kanjorski bill that would allow producer licensing reciprocity in all states as long as standards for those producers were maintained at a high level. It also supported a bill to develop a system of surplus lines for reinsurance and reinsurance collateralization, and is also working on modernization for reinsurance through its new Reinsurance Supervision Review Department (RSRD), created under its Reinsurance Regulatory Modernization Framework Proposal; the RSRD will look at the supervisory requirements for reinsurance in other countries, and, according to an earlier NAIC announcement, “establish standards for a state to be certified to regulate insurance on a cross-border basis.”
International matters, says Sevigny, are very high on NAIC’s priority list. NAIC is fortunate, he says, to have three members on the executive committee of the International Insurance Society (IIS), and a subcommittee that will help to shape the future of international insurance regulation will be chaired by Commissioner Sandy Praeger, the outgoing president of NAIC. So, Sevigny says, NAIC will have a significant role in shaping the future of international insurance regulation.
The two most urgent issues before NAIC in 2009, he says, will be health insurance and how it may change under the new administration, and the consideration of capital and surplus relief as requested by the American Council of Life Insurers (ACLI).
Marlene Y. Satter, a freelance business writer who can be reached at [email protected].