Whether or not it comes in the form of an OFC, exclusive federal charter or if the NAIC actually gets all the states to participate in another compact, there has GOT to be some reform and modernization.
The states aren’t doing a very good job of getting on with uniformity. It has taken how many years to get 30 of them to participate in the current interstate compact… over 6 years? So do we wait another 4 years for the remaining states and territories to jump on board? Why? What’s the hold up? Do they dislike the terms of the compact or something? Of interesting note, it’s primarily the bigger states that aren’t a part of it yet. Hrrrmmmm…
I agree with Soto that keeping the customer-service type things, such as complaint response, on a state level certainly has it’s benefits as far as response time and being locally familiar.
However, there are some much bigger problems that needed attention 40 years ago. Because of the regulatory burden in bringing new products to market, it reduces competition and innovation.
Then there’s licensing! What a train wreck. Bell claims “all states” are using the uniform app… NOT. Not for all major lines anyway. And even for the states who do use the uniform app, some have special addendums producers have to submit. Some states require bonds, fingerprints, exams, etc. that other states don’t. For a small brokerage, this is extremely restrictive and again, it hurts the consumer by reducing competition.
The issue of coverage not being portable is another thing which SHOULD have been taken care of on a state level decades ago. But it wasn’t and looks like it won’t be… ever. Isn’t that absurd? Sure, P&C risk exposure differs from location to location, but does that mean you need a different agent or broker every time you move? If you’re familiar with one producer and that producer is familiar with you, doesn’t it make sense to stick with them and let underwriting deal with re-rating the policy when an insured relocates?
I don’t know if an optional federal charter is the answer. But some sort of compromise between federal regulation and state oversight can and should be reached. I would even go so far as to say this could be done without major industry interruption.
And in an opinionated editorial aside, Brad Sherman (CA) is smug and rude and doesn’t seem to know his head from a hole in the ground when it comes to the insurance industry as evidenced by the bang up job he did of showing his confusion today at the hearing by asking questions which had uncertain relevance to the topic and then proceeded to frequently interrupt the witnesses when they attempted to answer him. How did this guy get elected in the first place with people skills like that?!
It was long (3 hours) but gripping.
Whether or not it comes in the form of an OFC, exclusive federal charter or if the NAIC actually gets all the states to participate in another compact, there has GOT to be some reform and modernization.
The states aren’t doing a very good job of getting on with uniformity. It has taken how many years to get 30 of them to participate in the current interstate compact… over 6 years? So do we wait another 4 years for the remaining states and territories to jump on board? Why? What’s the hold up? Do they dislike the terms of the compact or something? Of interesting note, it’s primarily the bigger states that aren’t a part of it yet. Hrrrmmmm…
I agree with Soto that keeping the customer-service type things, such as complaint response, on a state level certainly has it’s benefits as far as response time and being locally familiar.
However, there are some much bigger problems that needed attention 40 years ago. Because of the regulatory burden in bringing new products to market, it reduces competition and innovation.
Then there’s licensing! What a train wreck. Bell claims “all states” are using the uniform app… NOT. Not for all major lines anyway. And even for the states who do use the uniform app, some have special addendums producers have to submit. Some states require bonds, fingerprints, exams, etc. that other states don’t. For a small brokerage, this is extremely restrictive and again, it hurts the consumer by reducing competition.
The issue of coverage not being portable is another thing which SHOULD have been taken care of on a state level decades ago. But it wasn’t and looks like it won’t be… ever. Isn’t that absurd? Sure, P&C risk exposure differs from location to location, but does that mean you need a different agent or broker every time you move? If you’re familiar with one producer and that producer is familiar with you, doesn’t it make sense to stick with them and let underwriting deal with re-rating the policy when an insured relocates?
I don’t know if an optional federal charter is the answer. But some sort of compromise between federal regulation and state oversight can and should be reached. I would even go so far as to say this could be done without major industry interruption.
And in an opinionated editorial aside, Brad Sherman (CA) is smug and rude and doesn’t seem to know his head from a hole in the ground when it comes to the insurance industry as evidenced by the bang up job he did of showing his confusion today at the hearing by asking questions which had uncertain relevance to the topic and then proceeded to frequently interrupt the witnesses when they attempted to answer him. How did this guy get elected in the first place with people skills like that?!