The National Association of Professional Insurance Agents (PIA) says it is encouraged by the discussion draft of a bill that provides a “road map” for insurance regulatory reform. The draft of the State Modernization and Regulatory Transparency Act (SMART) was released last week by the House Financial Services Committee.
“This draft addresses many of the goals PIA supports to ensure regulatory modernization, in a manner that preserves the principle of state regulation of insurance,” said PIA National Executive Vice President and CEO Len Brevik. “We are particularly pleased that this bill seeks to accomplish these goals without creating an optional federal charter or establishing a federal insurance ‘czar’ to oversee the insurance industry, two things PIA strongly opposes.”
PIA is firmly committed to regulatory modernization that preserves functional state regulation of insurance. Brevik added that despite being pleased with many of the provisions included in the discussion draft, PIA will not issue a blanket endorsement at this time.
“Since PIA believes that state regulatory reform should proceed from the states up to Congress, rather than the other way around, we will not give all the provisions in this discussion draft our blanket endorsement at this time, other than to say that the draft as a whole is very positive.” Brevik said. “We think it is important that any concerns expressed by state insurance commissioners through the National Association of Insurance Commissioners (NAIC) after they review it be afforded full and complete consideration as this process continues.”
A provision for the creation of an advisory council comprised of state and federal regulators that would have no regulatory power, but would mediate disputes and report back to Congress on compliance, appears to be well thought out. However, according to PIA, New York Superintendent of Insurance Greg Serio, chairman of government affairs for the NAIC, was quoted in an Aug. 26 interview with the Bureau of National Affairs (BNA) as saying one concern state regulators have with the draft is with the notion of a federal entity, that lacks a concrete format and structure, not being needed because of changes in state regulation and those in this bill.
PIA noted that specific provisions in the draft addressing regulatory modernization are very positive.
“The draft takes a proactive position toward uniformity in producer licensing by requiring uniform licensing standards, licensing reciprocity and by prohibiting discrimination against non-resident agents and brokers,” said PIA National Director of Business and Compliance Affairs Timothy K. Kovac. “It also wipes out ‘cumulative conditions and regulations for multi-state agents and brokers.’ Taken together, these specific changes will make it easier for independent agents to spread their operations into other states, and even aid in the process of picking up new lines of business.”
“Knowing that how they do business in one state will meet the criteria in other states due to uniformity in licensing can ease any apprehension among producers about entering a new marketplace,” Kovac said.
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