Insurance Professor: Regulators Should Open the Curtains

Schwarz cited the mortgage disclosure forms recently developed by the new Consumer Financial Protection Bureau and the health insurance product summaries recently proposed by the U.S. Department of Health and Human Services as examples of good models for disclosure forms for other types of insurance products.

Schwarz also asked why insurance regulators have not done more to change state laws that classify insurance company market conduct information as being confidential.

Mary Weiss, an insurance professor at Temple University, noted that some critics of the state of insurance regulation have recommended letting insurers be regulated by a federal agency.

“Although there are arguments in favor of federal chartering, I believe there are better reasons not to follow such a route,” Weiss said. “In my opinion, large insurers would likely opt for federal chartering, and these insurers could present a powerful lobbying force to the federal regulator. In fact, the regulator might be prone to regulatory capture, a phenomenon in which the regulator ends up serving the interests of the regulated entities rather than pursuing traditional goals of regulation.”

Other federal insurance regulation coverage from National Underwriter Life & Health:

• PPACA: Feds Try to Make Coverage Easier to Understand
• Voss: States to Keep the Reins
• NAIC Rep Testifies on FSOC Restrictions
• FSOC: Senate Panel Approves Woodall
• It s Time for an Optional Federal Charter