Modernization of how states monitor insurer market conduct is a key element to preserving state regulation of insurance, and state legislators can play a key role in making sure existing initiatives are implemented quickly and efficiently, according to a long-time industry observer.
“State legislators can best advance the goal of more effective and efficient market conduct surveillance of insurers by ensuring that existing reforms are actually being implemented,” Lenore Marema, vice president of legal and regulatory affairs for the Alliance of American Insurers, told a meeting of the National Conference of Insurance Legislators (NCOIL) in Chicago on Friday.
Toward this end, she urged legislators to “assert your jurisdiction by creating a blueprint for action that will take the National Association of Insurance Commissioners’ four major market conduct regulatory reform initiatives – market analysis, uniformity of exam procedures, market regulation resources and interstate collaboration/reciprocity – and develop the plan to implement these initiatives and then make sure it gets done.
“We don’t need a whole new law,” Marema said. “NCOIL and individual state legislators can play a significant role by conducting oversight hearings in their states to assure that needed reforms are adopted, and once adopted, implemented.”
Marema noted that state legislators and regulators have a common interest in getting this done.
“The U.S. Congress is checking on state progress on regulatory modernization issues. Why shouldn’t the states be conducting this oversight instead? Advocates of federal regulation ask ‘why don’t the big states play on some regulatory modernization issues?’ State legislators from those states should be the ones inquiring why they don’t go along with regulatory reform when many other states do.”
Calling for more cooperation between NCOIL and the NAIC, she concluded that, “You can continue to play Athens v. Sparta if you want to, but sooner or later a failure to coordinate activity in this area could very well end up as a Greek Tragedy for state regulation of insurance.”
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