Certainly don’t need “dual regulation” and we all can agree to that. But having 50 states, each with varying, disparate, and often contradicting insurance regulations, requirements and parameters is also not the most efficient way to manage things particularly for residents who relocate from one state to another.
50 states = 50 Insurance commissioners = 50 different sets of rules.
Do you really think the Federal Government is more efficient than the separate states in regulating anything? They are a disaster in just about every area they get into. Nelson, the purveyor of the Cornhusker Kickback on Obamacare is sitting there drawing his Senate retirement benefits and now going to be drawing his CEO salary which should be a sweet deal. Each state should know their own insurance market and how it should be regulated to suit their citizens.
Imagine in a perfect world – on a multi-State commercial Auto policy, having ONE set of endorsements, instead of one set for each State. And the ease of administering and not having to explain differences to a buyer. Think of all that saved paper. It might even give me time to read a Masterpiece policy start to finish!
I agree with you. How can having 50 sets of separate governments on the same topic be anything but cumbersome and redundant. What we need is what every other insurer has around the world — one set of rules per line of business per country, with regional differences for rates depending on the exposures. Would also cut down the E&O exposure.
I agree. I worked for 10 years as a compliance paralegal for a 50 State insurance company. 50 States of insurance codes and regulations, AG opinions and so forth to read, thoroughly understand and be able to act upon, just to do business in 50 States.
I understand what you’re saying, and the NAIC is attempting to have all states follow the same rules. Unfortunately, there are too many differences in how the state legislators choose to protect their constituents. Not specifically regarding insurance, just all laws for each state.
Unfortunately, the property casualty insurance business operates in both worlds. They enjoy protections from DOJ scrutiny for anti-trust issues under the Mcarron Fergusen Act and when there is an effort to actually regulate their practices under state laws, they run to the Federal Courts for sanctuary.
The best example is probably the when the State of Louisiana tried to pursue settlement issues in Louisiana.
I’m all for state regulation. It would be nice if it was “live by the sword and die by the sword” for those of us who deal with this cat and mouse behavior on a daily basis.
No federal regulations. Ok, but don’t come looking to the taxpayer to bail the State out when it’s found to be “underwater” or “rife with corruption” Those days are over. Only a few make the rules at the State level, corrupt, no one goes to prison, and then the taxpayer is asked to bail them out. NO MORE! Every man for himself, or should I say every State for himself! Bankrupt yourself but don’t come looking for handouts later.
It should be very simple to see that “dual regulation” implies “dual expenses” to the insurance company (more duplication in reporting requirements with differing formats; more staff hours for compliance departments) and higher costs to consumers.
It the argument for Federal Regulation of insurance is to protect the consumer, it should include protecting the consumer from unneeded increases in their premiums to cover unneeded additional operating costs.
When the Federal Government steps in, things get so complicated that it requires a bank of attorney’s to even determine what the regulation actually says, let alone HOW it is supposed to be followed. (remember the Terrorism act and more recently the problems and costs associated with Medicare reporting and claim settlements?)
State insurance regulations may vary, but the NAIC has accomplished a lot on the reporting end as far as identifying and smoothing out the variables. States, and their residents, have differing insurance needs. Let them regulate their own Insurance Departments and keep the Federal Government out of it.
Linda, I enjoyed reading your post. You make a lot of sense. The NAIC can work together to make the regulations more uniform, but there will always be some differences due to State Laws and existing regulations. The Federal Government has no place in regulating the insurance industry. Look at the mess they made with Obamacare, a 2,700 page travesty and creating the monster of HHS which will continue to grow larger and more powerful in the coming years. We need to keep the Feds out of our industry since they are already bloated and inherently inefficient.
The NAIC is most fortuneate to have former Senator Ben Nelson at the helm. As a reinsurance intermediary, I was privledged to have Ben as a client when he was President & CEO of the Centeral National Insurance Group of Companies, and witnessed first hand his indepth understanding and appreciation of the reinsurance marketplace, and how it effects the direct insurance market.
It’s pretty simple. The exposure to risk is different for each state with diffent building codes, liability responsiblity laws etc. The FEDS will try and treat it all alike. You might be able to do that with life insurance, but not p/c. It’s like Obamacare requiring everyone to have the same health insurance. Do fifty and sixty year olds need maternity coverage??
States + Feds equals 51 regulators.
Do consumers in each state really require different protection? I might be presuming too much, but I would think most consumers would prefer their insurance company not to become insolvent. I don’t see why a lot of efficiency could not be gained by regulating at the federal level. Albeit it is a smaller market, Canadian insurance companies are regulated (apparently quite rigorously) by a federal superintendent of financial insitutions (which also oversees banks), and having worked on both sides of the border, it appears much harder for Canadian companies to game the system through loop holes.
I ask again, do you really think the FEDS are capable of efficient and transparent regulation? Just look at the subprime mess in the home mortgage business. They were completely asleep at the switch, didn’t think there was a problem, failed to regulate Fannie & Freddie and it almost caused a complet meltdown in the economy. That is just one example and there is not room to list all the others in this blog. I’m sorry, but I prefer to have regulation at the local state level since they are familiar with the needs of their state and can monitor companies more closely. The NAIC can work together to make things more uniform and have had some improvements in recent years, but I don’t want the FEDS sticking their nose in where it doesn’t belong.
Certainly don’t need “dual regulation” and we all can agree to that. But having 50 states, each with varying, disparate, and often contradicting insurance regulations, requirements and parameters is also not the most efficient way to manage things particularly for residents who relocate from one state to another.
50 states = 50 Insurance commissioners = 50 different sets of rules.
Do you really think the Federal Government is more efficient than the separate states in regulating anything? They are a disaster in just about every area they get into. Nelson, the purveyor of the Cornhusker Kickback on Obamacare is sitting there drawing his Senate retirement benefits and now going to be drawing his CEO salary which should be a sweet deal. Each state should know their own insurance market and how it should be regulated to suit their citizens.
Agent — do you or do you not want less government?
Imagine in a perfect world – on a multi-State commercial Auto policy, having ONE set of endorsements, instead of one set for each State. And the ease of administering and not having to explain differences to a buyer. Think of all that saved paper. It might even give me time to read a Masterpiece policy start to finish!
I agree with you. How can having 50 sets of separate governments on the same topic be anything but cumbersome and redundant. What we need is what every other insurer has around the world — one set of rules per line of business per country, with regional differences for rates depending on the exposures. Would also cut down the E&O exposure.
I agree. I worked for 10 years as a compliance paralegal for a 50 State insurance company. 50 States of insurance codes and regulations, AG opinions and so forth to read, thoroughly understand and be able to act upon, just to do business in 50 States.
I understand what you’re saying, and the NAIC is attempting to have all states follow the same rules. Unfortunately, there are too many differences in how the state legislators choose to protect their constituents. Not specifically regarding insurance, just all laws for each state.
Not only is it inefficient it is also expensive and costly.
Unfortunately, the property casualty insurance business operates in both worlds. They enjoy protections from DOJ scrutiny for anti-trust issues under the Mcarron Fergusen Act and when there is an effort to actually regulate their practices under state laws, they run to the Federal Courts for sanctuary.
The best example is probably the when the State of Louisiana tried to pursue settlement issues in Louisiana.
I’m all for state regulation. It would be nice if it was “live by the sword and die by the sword” for those of us who deal with this cat and mouse behavior on a daily basis.
No federal regulations. Ok, but don’t come looking to the taxpayer to bail the State out when it’s found to be “underwater” or “rife with corruption” Those days are over. Only a few make the rules at the State level, corrupt, no one goes to prison, and then the taxpayer is asked to bail them out. NO MORE! Every man for himself, or should I say every State for himself! Bankrupt yourself but don’t come looking for handouts later.
How is your rant relevant to the topic of dual regulation?
He’s talking about AIG.
Color me blonde, I still don’t understand.
It should be very simple to see that “dual regulation” implies “dual expenses” to the insurance company (more duplication in reporting requirements with differing formats; more staff hours for compliance departments) and higher costs to consumers.
It the argument for Federal Regulation of insurance is to protect the consumer, it should include protecting the consumer from unneeded increases in their premiums to cover unneeded additional operating costs.
When the Federal Government steps in, things get so complicated that it requires a bank of attorney’s to even determine what the regulation actually says, let alone HOW it is supposed to be followed. (remember the Terrorism act and more recently the problems and costs associated with Medicare reporting and claim settlements?)
State insurance regulations may vary, but the NAIC has accomplished a lot on the reporting end as far as identifying and smoothing out the variables. States, and their residents, have differing insurance needs. Let them regulate their own Insurance Departments and keep the Federal Government out of it.
Linda, I enjoyed reading your post. You make a lot of sense. The NAIC can work together to make the regulations more uniform, but there will always be some differences due to State Laws and existing regulations. The Federal Government has no place in regulating the insurance industry. Look at the mess they made with Obamacare, a 2,700 page travesty and creating the monster of HHS which will continue to grow larger and more powerful in the coming years. We need to keep the Feds out of our industry since they are already bloated and inherently inefficient.
Thank you, Linda.
The NAIC is most fortuneate to have former Senator Ben Nelson at the helm. As a reinsurance intermediary, I was privledged to have Ben as a client when he was President & CEO of the Centeral National Insurance Group of Companies, and witnessed first hand his indepth understanding and appreciation of the reinsurance marketplace, and how it effects the direct insurance market.
It’s pretty simple. The exposure to risk is different for each state with diffent building codes, liability responsiblity laws etc. The FEDS will try and treat it all alike. You might be able to do that with life insurance, but not p/c. It’s like Obamacare requiring everyone to have the same health insurance. Do fifty and sixty year olds need maternity coverage??
States + Feds equals 51 regulators.
Do consumers in each state really require different protection? I might be presuming too much, but I would think most consumers would prefer their insurance company not to become insolvent. I don’t see why a lot of efficiency could not be gained by regulating at the federal level. Albeit it is a smaller market, Canadian insurance companies are regulated (apparently quite rigorously) by a federal superintendent of financial insitutions (which also oversees banks), and having worked on both sides of the border, it appears much harder for Canadian companies to game the system through loop holes.
I ask again, do you really think the FEDS are capable of efficient and transparent regulation? Just look at the subprime mess in the home mortgage business. They were completely asleep at the switch, didn’t think there was a problem, failed to regulate Fannie & Freddie and it almost caused a complet meltdown in the economy. That is just one example and there is not room to list all the others in this blog. I’m sorry, but I prefer to have regulation at the local state level since they are familiar with the needs of their state and can monitor companies more closely. The NAIC can work together to make things more uniform and have had some improvements in recent years, but I don’t want the FEDS sticking their nose in where it doesn’t belong.