Not surprisingly, there has been a lot of official support and approval from both carriers and industry groups for the bipartisan House version (H.R. 3200) of the 2007 National Insurance Act that was introduced last week by Representatives Melissa Bean (D-Ill.) and Ed Royce (R-Cal.). With the presentation of this companion legislation to S.40, authored by Senators Tim Johnson (D-S.D.) and John Sununu (R-N.H.), which was introduced in May, it seems clear that the momentum for an Optional Federal Charter (OFC) is growing in Congress, although of course it remains to be seen whether insurance regulation reform will be a front-burner issue when the legislators return from summer breaks.The official statements that came out from entities such as Nationwide, Allianz of America, ACLI, The Council of Insurance Agents & Brokers and Agents for Change emphasized the by-now-familiar arguments that an OFC will bring efficiency to the market and benefits to consumers in terms of lower rates. Only time will tell if these benefits actually ensue from an OFC, should it eventually be approved. Obviously carriers wouldn't be able to take advantage of the reforms without improved internal processes and infrastructure that also enable efficient operations and speed-to-market.
While there's obviously corporate self-interest behind the push for an OFC (no matter how much companies talk about helping consumers) one hopes that the movement also signifies objective recognition among insurance executives that the business is changing -- especially in terms of who the customers are and how they are going to do business with insurers and other financial services providers.
That's why the official statement that came out yesterday from Des Moines-based Principal Financial Group was particularly interesting to me. Larry Zimpleman, president and COO of The Principal, stated in the release: "E-commerce and globalization of financial services brings an added dimension to an already complicated industry."
It's encouraging to see senior-level recognition of the fact that technology is transforming the business.
Posted by Kathy Burger
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio