State Legislatures Key To Preserving State Insurance

May 8, 2000

State legislators hold the key to preserving state insurance regulation, an official of the National Association of Mutual Insurance Companies (NAMIC) told an audience at the spring meeting of the National Conference of State Legislators (NCSL) in Washington, D.C., Friday.

“The best-crafted reforms will only be as good as the strategy to secure their enactment,” said NAMIC’s Vice President of Regulatory Affairs, Roger H. Schmelzer. Schmelzer was one of four panelists taking part in a discussion entitled, “Federal Regulation of Insurance: Tomorrow’s Headline.”

Schmelzer said the recent Statement of Intent document published by the National Association of Insurance Commissioners (NAIC) and NAMIC’s own Accepting the Challenge report suggest “a high level of consensus between regulators and a large segment of the property/casualty industry, increasing the potential for enactment of a uniformity agenda by individual states.”

The NAMIC official, who noted that the NAIC usually bears the brunt of criticism for the lack of cooperation by the states, called that criticism “mostly unfair” and said that it misses the point. “The NAIC has no authority to compel a state to act,” Schmelzer said. “It [the NAIC] must rely solely on the commitment and political acumen of commissioners to return to their home state and articulate the need for new insurance laws to their state legislature.”

He added that sole reliance on commissioners and directors of insurance will not bring about the changes that are needed to preserve state regulation. “State legislatures hold the key to the preservation of state insurance regulation,” Schmelzer said. “Our theory is simple: if uniform practices are passed in the states, state regulation will continue.”

Schmelzer said NAMIC is focusing on an implementation strategy that would bring together industry representatives, regulators and legislators in a joint, collaborative effort to enact more uniform practices.

“There will never be a better time than now to redefine state insurance regulation and the way to reach that goal is to implement more uniform procedures and greater consistency of state standards,” Schmelzer said. “Once state regulation is working the way it can, it will be very difficult for anyone to convince Congress that a federal system is superior.”

The full text of Schmelzer’s statement is available on NAMIC’s web site at www.namic.org/r/ncsl/050500.htm.

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