The National Association of Independent Insurers (NAII) praised members of the National Conference of State Legislatures (NCSL) for
adoption of its “Statement of Principles for the Regulation of Property Casualty Insurance,” at their meeting this week.
According to NAII, the NCSL’s Statement of Principles encourages
modernization efforts while staunchly supporting state insurance regulation.
“The NCSL Statement of Principles rightfully points out that state regulation is accessible, accountable and responsive and operates with greater efficiency than would a vast new federal bureaucracy,” said NAII Counsel Laura Kotelman. “NAII believes that state legislatures are uniquely positioned to set policies that reflect the values and concerns of local citizens and that the economy benefits from regulation tailored to serve local economic needs. NCSL has taken a critical step by adopting these principles and we congratulate them and will support their efforts.”
Kotelman said that NCSL suggested specific strategies to modernize state insurance regulation. The following is a list of the basic points included in the Statement of Principles:
· State legislatures are encouraged to consider systems of product regulation that rely increasingly on competitive forces to determine property/casualty insurance rates and to promote the more efficient introduction of new products into the marketplace, while preserving state authority to take action in a noncompetitive market and against rates that are inadequate or unfairly discriminatory.
· State legislatures are encouraged to consider market-based systems that would allow competitive forces to shape the development and the price of products sold by commercial insurers and would enable insurers to respond with greater innovation and flexibility to the evermore demanding needs of American business.
· State legislatures are encouraged to work with insurance commissioners to clarify regulatory standards and requirements and to eliminate inefficient and redundant regulation that serve less value to consumers and add unnecessary burdens, delays and costs to the system.
· State legislatures are encouraged to consider directing greater insurance department resources to market regulation, anti-fraud and financial solvency efforts in order to provide more tangible consumers benefits.
· State legislatures are encouraged to support the efforts of insurance commissioners to improve market regulation; to create more efficient, effective and uniform market conduct examinations; to promote the use of technology; and to coordinate with other states in order to eliminate redundancy and stretch resources.
· State legislatures are encouraged to exercise oversight and investigatory functions to evaluate modernization efforts at the regulatory level and to encourage industry participation in improvements to state-based systems.
“The adoption of the Statement of Principles by NCSL’s Executive Committee Task Force is the result of an effort that began in October 2001,” said Kotelman. “The NAII has been involved from the beginning, strongly backing the main goal of the committee which was to streamline and simplify insurance regulation. NCSL hits on top components to modernizing the system such as market conduct reform, speed to market and competitive rating as key areas that are essential to modernization.
“NCSL sees the important value of local oversight, yet agrees with other insurance organizations such as the National Association of Insurance Commissioners (NAIC) and the National Conference of Insurance Legislators (NCOIL) that insurance regulation must change to meet the needs of the modern economy. We applaud their efforts and hope that they will work with others to help expedite modernization and preservation of state insurance regulation.”
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