The Independent Insurance Agents of America (IIAA) continues to support state insurance regulation and will be working closely with the National Association of Insurance Commissioners (NAIC) and other allies who support state regulation to modernize and streamline industry oversight, IIAA President Thomas B. Ahart told state insurance regulators last week at an insurance commissioners-only retreat in San Antonio on Feb. 8.
“The IIAA supports state regulation,” Ahart said. “Nothing has changed in this regard, not even with the adoption of IIAA’s new pragmatic, middle-ground policy that aims to streamline and modernize the state regulatory system. Under the approach adopted by the Big ‘I’, which is also supported by other agent groups, Congress would play a role in achieving desired state reforms by utilizing the legislative tools at its disposal to bring about greater consistency across state lines and to enact needed reforms.
“We believe our approach is pragmatic,” Ahart continued. “By using federal legislative action to overcome the structural impediments to reform at the state level, we can improve rather than replace the state-based system and promote a more efficient and effective regulatory framework. In this way, we can assure that insurance oversight will continue to be grounded on the proven skills and experience that all of you have as regulators.
“This approach offers the best of all worlds. It will help us achieve more uniform regulation from state to state and protect consumers while enhancing marketplace responsiveness,” Ahart explained. “And it builds on, rather than dismantles, the states’ proven strengths to help meet the challenges of a rapidly changing insurance environment. The approach advocated by IIAA could be used to address a variety of issues that have been identified as areas in need of reform. Such a bill could address such leading concerns as speed-to-market reform, agent and company licensing, market conduct exams, corporate governance, and a variety of other areas. This approach does not require a one-size-fits-all response. Instead, it would allow the use of different legislative fixes on a tailored, issue-by-issue basis.”
In developing issue-specific solutions, Congress could employ a variety of legislative tools. By turning to Congress for assistance, the industry will be able to overcome the structural impediments to reform at the state level and achieve multi-state reform very quickly. Examples of how this approach might work include implementing reciprocity for agent licensing on a 50-state basis, using the NAIC model law as a guide, and limiting state reviews of rates and forms to 30 days to streamline the speed-to-market process for new insurance products.
“Implementing these reforms on a 50-state basis would bring about dramatic and unprecedented change. It would also accomplish much of what those companies that advocate federal regulation need to operate on a national or super regional basis,” Ahart opined. “The adoption of this new IIAA policy position should not be taken as a rebuke of the fine work that you have done in the last two years. The NAIC has made great progress since the adoption of the now-famous Statement of Intent, and there have been many positive changes at the state level. You-the commissioners-have taken ownership of these difficult issues, and the unprecedented amount of direct participation by commissioners has proven fruitful.”
Ahart added that IIAA’s new position is not an abandonment of state regulation. “I want to be very clear about one point: our proposal would not establish a federal regulator or a regulatory structure at the federal level,” he said. “While we strongly believe there is a need for greater efficiency and uniformity, pursuing an optional federal chartering solution goes too far.Unlike the proposals of others, the approach advocated by IIAA is state-friendly, and its objective is to streamline and reform the state regulatory system, not create a new or parallel regulatory system at the federal level. For this reason, I encourage you to consider our proposal with an open mind.
“You should also understand that we are willing to work with you on this proposal as we move forward,” Ahart concluded. “State regulators and the NAIC are key stakeholders, and we look forward to working with you.”
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