The Insurance Marketplace Standards Association (IMSA) called for industry leaders to step up and take charge of efforts to improve regulatory procedures.
IMSA executive director Brian Atchinson warned, The industry needs to move quickly and decisively to fix what’s wrong with the system, or it will get fixed for us by those who don’t know our business as well as we do.
Atchinson said the insurance industry needs to adopt consistent, uniform standards and regulations with an eye on how the consumer is being treated. Noting that the marketplace has evolved beyond the existing regulatory structure, Atchinson added that the needlessly duplicative regulatory process wastes the resources of insurance regulators, consumers and the industry. This simply can not continue, he said. We need to find a way so that whether you are in Kansas City, Mo., or Kansas City, Ks., Springfield, Ill., or Springfield, Mass., you as a company or you as a consumer are treated the same in both states.
He praised state insurance commissioners and industry leaders who are trying to achieve regulatory reform but said overall industry action is needed.
Noting that continued inconsistency in state market conduct oversight helped trigger U.S. House Financial Services Committee hearings scheduled for this spring, Atchinson said, “This is a wake-up call to the industry and the states. We have to start solving our regulatory problems or the federal government will do it for us.”
He predicted a greater federal role would lead to one of three alternatives: New national standards enforced by the states; New federal standards enforced by a federal agency based in Washington, DC; or Compliance responsibility shifting from state insurance departments back to insurance companies, where Atchinson suggested it belongs.
Atchinson recommended that regulators not focus exclusively of individual cases of compliance lapses, but rather on some measure of overall effectiveness of a company’s systems and procedures. He termed as positive the initial steps of the National Association of Insurance Commissioners to develop uniform risk analysis surveys so states could decide what issues are most important and how often to examine companies. There also could be value-added evaluations that focus on systems and controls that have the biggest impact on consumers, he said.
Atchinson pledged that IMSA will continue to work with industry, state and national officials and consumers to develop and implement a regulatory cure.