Iuppa Addresses Future of Regulation at PCI Meeting

By | October 26, 2005

Taking up the banner for the current state-based insurance regulatory system in the face of sometimes hostile critics, Maine Superintendent of Insurance Alessandro Iuppa defended the system and approaches taken by the National Association of Insurance Commissioners (NAIC) to expedite processes through technology.

Speaking today in Chicago at the annual meeting of the Property Casualty Insurers Association of America (PCI), Iuppa highlighted the NAIC’s ongoing efforts to automate processes like insurer annual statements, rate and form filing, and producer licensing as indicative of the future of insurance regulation.

“Although it’s easier to say what will happen (to insurance regulation) 20 years from now than 20 weeks from now, I can sum it up in one word: technology,” Iuppa said. “It’s the wheel that’s moving us forward.”

Iuppa recalled the regulatory environment of the mid-1980s, when the March 1 onslaught of insurer annual statements meant a months-long processing nightmare for state insurance departments. Today, because of automation, the process is an “afterthought” accomplished in days, even at the NAIC, where financial information is filed.

Today’s annual statement contains more than 400,000 information elements, making them a powerful tool for insurer solvency regulation, which is the key responsibility of regulators, he said.

Another successful automation initiative promoted by the NAIC is the Web-based SERFF rate-and-form filing system, which processed more than 150,000 filings in 2004, Iuppa said. The NAIC has budgeted for accellerating use of SERFF, which is faster and more cost effective for both insurers and regulators.

Web-based systems have also made producer licensing a process that now takes days or hours instead of weeks, he added.

Insurance regulation is increasingly affected by external issues. State politics, for instance, have had a major impact on regulation in recent weeks, as the industry deals with the fallout from Hurricanes Katrina and Rita. Efforts in Mississippi to make insurers liable for flood coverage, while politically motivated, must be responded to by the industry. “You’re out there selling promises, an intangible,” he said. “There’s a certain amount of trust involved.”

Topics Trends Legislation

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