Making changes to the current system of regulating insurance is not without risk, a former director of the Illinois Department of Insurance says.
“The insurance industry has been mired in this most significant regulatory debate since well before the current recession,” writes Mark Boozell in a new white paper.
The former director of the Illinois Department of Insurance (1995-1998), Boozell wrote the paper for the Professional Insurance Agents Insurance Foundation, Washington, D.C.
A plethora of federal agencies and entities already have “some measure of authority” over various aspects of insurance, he points out. Since insurance remains a state-regulated business, these federal entities work regularly with state insurance departments and the National Association of Insurance Commissioners to coordinate activities.
Acknowledging this, “the Obama administration has called for a new office of insurance within the Treasury Department but will not propose federal regulation of the insurance industry as a part of its sweeping financial reform plan,” writes Boozell.
But he cautions that “the devil is in the details.” The report discusses some of those details.
For instance, the assessments, questions, suggestions and even some of the proposed solutions thus far presented “have at times appeared to be greatly over simplified,” Boozell writes. He cautions that “there are critical material differences that apply to the business of insurance that do not apply in other financial services areas.”