Posted On: November 1, 2007, 2:36 pm CDT

Posted By: observer

I work in product development for a regional P&C insurance carrier. I have pretty close interactions with the various Sate departments of insurance. What capacity do you work in?

At any rate, I looked up the budget numbers of other Federal Regulatory Agencies:

Office of Comptroller and Current (Regulator of Federally Chartered Banks) has a projected 2008 budget of roughly $700 million.

link: http://www.treas.gov/offices/management/budget/budgetinbrief/fy2008/FY_2008_BIB_OCC.pdf

The Federal Trade Commision, charged with consumer protection and maintaining competition in various industries, has a projected 2008 budget of $240 Million (p. 39 of link).
http://www.ftc.gov/ftc/oed/fmo/budgetsummary08.pdf

These numbers look pretty reasonable to me given the broad responsibilities of each department. When compared to the aggregate cost of 50 state departments of insurance, it looks pretty clear that the state based system imposes pretty high costs on consumers through duplication of services/activities. BTW, the $12 billion figure I cited for industry premium taxes can be found in the 2006 AM Best aggregate and averages.

Federal regulators of other industries have proven themselves more efficient, less political, and more responsive to consumers. Most importantly, they have done a better job of toeing the line between ensuring fair treatment of customers while still recognizing the need of industry to earn profits to create a viable and competitive marketplace.