Three years ago at AALU’s annual meeting, Tony Gordon sounded the warning bell about when regulators have unlimited power.
On Monday morning at the 2010 AALU Annual Meeting in Washington D.C., Gordon was at it again with Episode II – and it read like a horror movie.
Gordon, former president of LIA and MDRT, knows quite a bit about regulators massing and abusing power, as he witnessed firsthand the destruction of Great Britain’s life insurance industry.
Prior to the creation of the Financial Services Authority – The U.K. equivalent of the SEC – there were about 150,000 insurance advisors in the U.K. There are fewer than 50,000 today. The number of life insurance carriers operating there has dropped off by 60%. The middle class is dangerously underserved as remaining advisors focus almost exclusively on the upper class.
“They’ve just about choked off the life of the financial service business in the U.K.,” Gordon said of the FSA.
Gordon warned AALU attendees not to think that a similar occurrence can’t happen in the U.S. and to be proactive in preventing it. “Stand up and be counted. Lobby like you’ve never lobbied before,” Gordon said.
“Tell your legislators to look across the pond. Tell your legislators to ignore the siren song of the regulator.”
Gordon said the problem is not merely regulation – the problem is BAD regulation from power-hungry regulators who don’t realize the consequences of their actions. He advised AALU members to do everything in their power to keep the state regulators and their “modest power” as opposed to the alternative — one federal regulator with enormous power. Under the FSA, the U.K.’s life insurance industry crumbled under poorly thought-out rules, the disastrous results of commission disclosure and an endless stream of ridiculous fines.
“AALU members have the strength and knowhow to stop what happened in my country from happening here,” Gordon said. “If you don’t fight this, no one will fight it for you.”
More from the AALU meeting – National Underwriter’s Warren Hersch: “Gingrich Calls For Changes“
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