WASHINGTON — Independent agents here at a conference heard Sen. Jon Tester, D-Mont., voice strong support for state insurance regulation.
Republican speakers at the conference, who discussed health care, said policymakkers who are trying to reform the health care system should avoid overregulation.
The conference was organized by the Independent Insurance Agents & Brokers of America, Washington.
Tester, a member of the Senate Appropriations Committee, told agents that the economic crisis has shown the necessity for regulatory reform of the financial industry, but he added that Congress must not overact and must make commonsense decisions.
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Insurance, Tester said, is one industry that does not need a federal overhaul, because the state regulators have played a “critical role” in ensuring that the fate of other financial institutions did not befall insurers.
He said his time as a state legislator in Montana taught him how effectively state regulators can oversee the insurance industry.
“Having served at the state level, I feel that regulation of the insurance industry should be handled at that level just as it has been for the last 140 years,” he declared, adding that expanding the reach of the federal government is not always the answer.
Regulations must be put in place to allow federal regulators to prevent the massive financial failures of large conglomerates, such as American International Group Inc., New York, and reforms of the insurance industry should streamline the agent licensing process and improve regulation covering flood and crop insurance, he said.
Tester compared regulators to referees on a basketball court. Regulators should set the ground rules for play and then get out of the way, only to step-in when those rules are violated, he said.