States Can Reportedly Achieve Competitive Markets; Federal Push Should Motivate State Action

November 6, 2003

Congress’ interest in insurance regulation should reportedly motivate state policymakers to act to make the insurance marketplace more competitive, according to a property/casualty trade association.

NAMIC, the National Association of Mutual Insurance Companies, conveyed that sentiment in a statement to Chairman Richard Baker, R-La., who is presided over Wednesday’s House Financial Services Capital Markets Subcommittee hearing on “Reforming Insurance Regulation-Making the Marketplace More Competitive for Consumers.”

“The liberalization of laws restricting insurers from operating freely within the marketplace will benefit consumers in the form of lower prices and greater selection of insurance products,” according to the NAMIC statement. “However, NAMIC member companies believe that greater competition is best achieved within a state regulatory system reformed by state legislatures and state regulators rather than by the Congress. Federal regulation of insurance is unproven and, in our view, a politically uncertain proposition. Artificial barriers to competition and regulations that vary from state to state without serving any public purpose should be and are being addressed by the states.”

NAMIC reportedly welcomed the Subcommittee’s in-depth review of efforts to reform state insurance regulation, stating, “Indications of an interest in insurance regulation by the Congress should motivate state policymakers to act.”

NAMIC added, “The key to insurance regulation reform is elimination of unnecessary regulatory barriers that impede competition while respecting those regulatory and legal differences that reflect a state’s unique underwriting and risk assessment environment. As an example, prior approval of rates is a discredited and outdated method of regulation that needlessly impairs the ability of regional and national insurers to bring new products to market quickly. Achieving balance between market conduct and competition is best left to states.”

The full NAMIC statement to the Capital Markets Subcommittee may be accessed at

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