The Alliance of American Insurers (AAI) testified June 4 before the U.S. House of Representatives Financial Services Capital Markets Subcommittee at the first of its hearings aimed at examining regulation and competition in the insurance industry.
“Alliance member companies strongly believe that the public policy objectives of insurance regulation can best be met by improving, not abandoning, the state system,” Ann Spragens, AAI senior vice president and general counsel, commented.
“We fully recognize the inefficiencies and delays in many of the state regulatory processes. In fact, the status quo is being rejected by virtually every stakeholder. However, we believe that the answer is to modernize the state system.
“The good news is that the states are making significant progress in meeting the challenges of the Gramm-Leach-Bliley Act. State efforts toward modernization and uniformity are progressing at a reasonable pace and should be given time to succeed.”
The Subcommittee began hearings last year to look at ways to increase competitiveness and uniformity in insurance markets. It has already held hearings on nationwide uniformity for agent licensing, the approval process for new insurance products and the over-regulation of automobile insurance, which has led to a lack of consumer choice in some states.
The AAI has been an advocate of modernization and harmonization within the context of state insurance regulation for the industry. State regulatory changes supported by the association include:
Standardization of company licensing requirements.
Adoption of self-certification system for forms.
Adoption of comprehensive commercial lines rate reform.
Standardization of filing memoranda and procedures for review.
Passage of producer licensing model acts where needed.
Development of a management system that will allow the development of comparative information on department performances.
Doing as much as possible immediately within existing laws and regulations.
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