The Independent Insurance Agents Association of New York voiced its opposition to any changes in the system of state regulation of insurers in an open letter, which takes issue with proposals supported by the American Insurance Association, the American Bankers Association Insurance Association and the American Council of Life Insurers, who are backing the adoption of a uniform federal system.
The IIAANY stressed that there’s been no movement by consumers to change the present system of state regulation. It pointed out that local needs vary in each state, and that it’s important to maintain local control over insurer solvency, licensing and anti-fraud enforcement procedures. It feels that a Federal statute would effectively “disenfranchise” local policyholders, who would lose the ability to influence the decisions of state legislatures and insurance regulators which directly affect their interests.
In addition the IIAANY pointed out that a two tier system would result in an increased regulatory burden on agents, who could be required to obtain two licenses, would establish differing standards for ratings and form regulation, and differing procedures for maintaining guarantee funds.
It urged the adoption of an alternative approach which would maintain the priorities of each state, but would seek to harmonize regulations and adopt common standards for company licensing, agency/broker licensing and education, and the setting up and maintenance of guarantee funds.
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