New York State Senator Kemp Hannon minced no words in his testimony today before the U.S. House Financial Services’ Subcommittee on Capital Markets Insurance and Government Sponsored Enterprises.
“For more than 150 years, states have successfully and effectively regulated the insurance industry,” stated Hannon, who is co-chair of NCSL’s Task Force to Streamline and Simplify Insurance Regulation. “Federal intervention at this point would introduce a host of unintended consequences.”
In the expanding debate on federal vs. state regulation of the insurance industry Hannon’s firmly on the side of the states. He indicated that any reform of the regulation process should remain at the state level, as this offers the best hope for a system that meets the needs of consumers and the industry.
“Federal legislation in the area of insurance regulation would be a tremendous mistake,” Senator Hannon continued. “It would endanger effective state regulation, threaten the creation of a vast new federal bureaucracy, risk state consumer protections, jeopardize insurer solvency and endanger the strength and stability of the insurance marketplace.”
Hannon’s remarks were cited in a press release from the NCSL, which also noted that “since 2001, state legislatures have streamlined and simplified state insurance laws. NCSL has endorsed model legislation to create uniform national standards for life insurance. Additionally, NCSL has endorsed a statement of principles to guide legislative efforts in updating property and casualty insurance rate and form requirements.”
The bulletin pointed out that it has been “State legislatures [that] have also passed laws to provide producer licensing reciprocity and to meet and exceed federal standards for insurance information privacy.”
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