Conn. Gov.: When It Comes to Insurance Regulation, States Are Here to Stay

May 14, 2014

  • May 14, 2014 at 1:42 pm
    Johns says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    I suspect he is wrong. The state based system of regulation works from a solvency and regulation perspective, but it is an expensive anti business arrangement that prevents competition, keeps prices artificially high and prevents national competition.

    It is a system which is perpetuated by the states and their regulators to preserve jobs and revenue. No one else wants it except some big insurance companies which regard it as a bar to new companies because it is so expensive to maintain the regulatory apparatus to comply with the 50-state laws. Other insurance companies like it because they can choose the regulator in the “dumb” state. Local insurance agencies like it because it keeps out national agencies.

    Let the insurance companies and agencies opt into a federal system and see what happens.

    Right now, if I want a 50 state agency, I need 50 licenses. In addition, I need 50 different websites since the states all have different requirements and approval processes.

    From an insurance company perspective, the state filings for policies and agents are endless. Even the state premium taxes are a hodgepodge of crazed laws.

    Increasingly, life insurance companies are competing with other financial service providers, who are not saddled with all these costs. PC insurers are competing on the internet in 50 states.

    The 50-state system is not needed, no longer makes sense and is hurting the insurance industry. Malloy is wrong.

    • May 14, 2014 at 1:52 pm
      Wild Bill says:
      Like or Dislike:
      Thumb up 0
      Thumb down 0

      Anyone with a knowledge of the S & L, investment banking and housing failures knows that federal regulation is manipulated by the regulated entities, is easily defrauded and has caused immeasurable harm to our economy. Name an insurance failure that has done that! (Don’t say AIG, because it was its financial branches that failed, not the insurance companies, more evidence of the strength of state finanacial regulation.) Finally, states are much more hands-on in responding to consumer complaints than the feds ever will be. Oh, did I mention Bernie Madoff? Who licensed and “regulated” him?

    • May 15, 2014 at 2:24 pm
      Libby says:
      Like or Dislike:
      Thumb up 0
      Thumb down 0

      I think you are confusing the ability to compete across state lines with health insurance with federal regulation. I don’t think any of us want federal regulation. Egads!

  • May 14, 2014 at 1:43 pm
    Wild Bill says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    I like it! Well said Gov. Malloy.

  • May 14, 2014 at 2:22 pm
    GenXUnderwriter says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    At the risk of sounding like a politician, I think both Johns and Wild Bill have excellent points. While state-specific regulation helps keep local territory issues at the forefront, it is also extremely complex and expensive from a compliance standpoint. This has led to the explosive growth of an E&S market that skirts most of the regulation all together.

    I think the states must learn to work together to streamline some of the various regulatory issues in order to create an easier and more efficient system for all parties. They’ve made some headway with systems like SERFF and NIPR, but it’s still insanely complex and expensive even with the aid of technology.

    • May 15, 2014 at 2:26 pm
      Libby says:
      Like or Dislike:
      Thumb up 0
      Thumb down 0

      “This has led to the explosive growth of an E&S market that skirts most of the regulation all together.”

      I think the market conditions dictate the growth of E&S more than regulation. Hard market = growth of E&S. Soft market = shrinking E&S business.



Add a Comment

Your email address will not be published. Required fields are marked *

*