Financial Stability Through Uniformity and Shared Resources

Systemic risk regulation should focus on coordination, collaboration and communication among various regulators.

The NAIC supports initiatives designed to enhance financial stability. We understand the need for a more global view of the risks that exist in our financial system. However, we do not believe financial stability is strengthened by vesting all authority within a single systemic risk regulator.

That is, we believe a system of systemic risk regulation should integrate the state insurance regulatory system and not displace it. It should be focused on coordination, collaboration and communication among the various regulators.

As for the broader subject of reform, the NAIC has adopted a set of principles for a nationwide system of insurance regulation. In those principles, we acknowledged the need for greater uniformity and reciprocity. We also described what we needed in any national structure that promotes uniformity and reciprocity.

Above all we encourage all insurers to fully utilize the many NAIC applications, systems and initiatives that state insurance regulators have developed to achieve modernization. Several NAIC regulatory tools -- such as the System for Electronic Rate and Form Filing, the National Insurance Producer Registry and the Online Fraud Reporting System -- were built with the intention of having as little impact on insurers' technology systems as possible.

The Financial Data Repository is another good example. The FDR provides a uniform platform for state-to-state collaboration and has proven to be an efficient, effective regulatory tool. Implementing the FDR did not dictate significant changes to insurance company infrastructure or technology; it simply leveraged what already existed: common end-user computer tools and the Internet.