The FIO has released its long-awaited report on insurance regulatory reform and modernization in the United States. The report discusses the steps that states may take to improve the insurance marketplace. Industry associations across the country were quick to respond:
The National Association of Mutual Insurance Companies (NAMIC) reacted soon after the news was released. “We respectfully disagree that federal involvement is necessarily the default answer,” said Charles M. Chamness, president and CEO of NAMIC, in a release. “There is much room for improvement at the level of state insurance regulation, but recent experience has not proven that a one-size fits all, nationally designed and operated program will remedy deficiencies and add real value.”
[ In other government-related news: Consumers Report Big Improvements in HealthCare.gov Usability. ]
The National Association of Insurance Commissioners (NAIC) believes that states should maintain decision-making power. “State regulators – both individually and collectively throughout the NAIC – are constantly working to improve our national state-based system of insurance regulation,” said Senator Ben Nelson, CEO of NAIC, in a release. “While we appreciate the FIO’s suggestion for improvement, the states have the ultimate responsibility for implementing regulatory changes.”
Independent Insurance Agents & Brokers of America, Inc. (IIABA or “Big ‘I’”) agrees that federal government involvement should be minimal. “We strongly believe that any federal action should be targeted and limited with day-to-day regulation left in the hands of state officials,” said Charles Symington, SVP of external and government affairs for the group. The IIABA is “ardently opposed” to any direct involvement by the federal government.
In a statement from the Property Casualty Insurers Association of America (PCIAA), president and CEO David Sampson claims the report is harsh on state-based systems. “There is little if any objective proof that there are critical gaps in state regulation or that it has failed to produce a beneficial market,” he states. “Federal regulation is not necessarily a panacea modernization solution.”
But the American Insurance Association (AIA) says that there is a need for improved regulatory uniformity. However, those next steps should be taken with caution, said Leigh Ann Pusey, president and CEO of AIA. “Any movement toward proposing binding risk classification standards would be counterproductive,” she stated as an example.
Kelly Sheridan is the Staff Editor at Dark Reading, where she focuses on cybersecurity news and analysis. She is a business technology journalist who previously reported for InformationWeek, where she covered Microsoft, and Insurance & Technology, where she covered financial ... View Full Bio