Finally some good news from a group that understands that federal oversight is always disastrous to private enterprise. I think these tea parties are really waking up America.
The headline of the April 16, 2009 Insurance Journal Online article, “Consumer Advocates Wary Of Federal Insurance Regulation Plans ” is misleading. The consumer advocates quoted in this article, liaisons for the NAIC, are not endorsing the current state-by-state insurance regulatory system.. Far from it.
These well-respected consumer advocates are seeking the best regulatory environment for insurance consumers, whether it be state regulation or federal regulation. They are wary of the current regulatory proposals for federal oversight, which everyone will agree, are either ill-defined, or which propose an Optional Federal Charter (where insurers could choose to be regulated either by federal or state regulators). Most will agree the OFC state and federal dual regulatory concept is much too cumbersome and confusing. After the regulatory failure with AIG’s financial products unit in London, and the huge international financial ramifications, Congress is clearly looking to a federal agency to coordinate and oversee the insurance industry.
In fact, without putting words in their mouth, I believe the two consumer advocates quoted would probably be the first to endorse the passage in Congress of a uniform federal insurance law (if it could be constructed), as long as it would be fair for consumers, offering more consumer protection and enforcement than is currently provided by the state regulatory system. A cost-effective federal insurance law, applicable to all states, adopting national standards, would have a sole federal regulator at the head, and would take the best of state insurance law, deputizing state insurance departments, allowing states or regions to add legislation or regulations to cover specific state or regional issues.. Provided there was enough pro-consumer detail in the proposal, most consumer advocates would endorse a federal oversight law.
This article should have been headlined “Some Consumer Advocates Wary of Current Federal Insurance Regulation Plans” . Adding the word “Some” and the word “Current to the headline would have been closer to the opinions expressed. Or, reversing the emphasis, this article could have been headlined “Consumer Advocates Say Proper Federal Insurance Regulation Not on Table — Yet”
At last, some common sense about insurance regulation. It is heartening to finally see people acknowledging that since everything that is insured is local, insurance regulation should be local. Money may flow around the globe in seconds with the click of a mouse, but insured risks are fixed in place. That’s why banks are different from insurance companies.
It is also nice to see an acknowledgment that there is more than one insurance consumer activist in all of the United States — i.e., J. Robert Hunter is not the only one!
“…After the regulatory failure with AIG’s financial products unit in London, and the huge international financial ramifications, Congress is clearly looking to a federal agency to coordinate and oversee the insurance industry” I point out your comment EDGE because it is just that pairing of the condition with the “solution” that makes this whole thing impractical. First because it was not AIG’s insurance section that is underwater, nor is it the insurance section that required bailing out. The “solution” is in search of a problem; what Congress should stay on is a review of the banking industry. But let me point out that it was the banking industry which lobbied, successfully, to have the restraint taken off that engendered the current disaster. At the same time, even if these consumer advocates could be convinced of a need to regulate insurance at the federal level, special interest groups will water down any proposal to accommodate all concerned: nothing good will come of that. This is how politics is done in the US, attempting to please all, we’ll please no one but the banks who will avoid additional scrutiny by mudding the waters.
Finally some good news from a group that understands that federal oversight is always disastrous to private enterprise. I think these tea parties are really waking up America.
The headline of the April 16, 2009 Insurance Journal Online article, “Consumer Advocates Wary Of Federal Insurance Regulation Plans ” is misleading. The consumer advocates quoted in this article, liaisons for the NAIC, are not endorsing the current state-by-state insurance regulatory system.. Far from it.
These well-respected consumer advocates are seeking the best regulatory environment for insurance consumers, whether it be state regulation or federal regulation. They are wary of the current regulatory proposals for federal oversight, which everyone will agree, are either ill-defined, or which propose an Optional Federal Charter (where insurers could choose to be regulated either by federal or state regulators). Most will agree the OFC state and federal dual regulatory concept is much too cumbersome and confusing. After the regulatory failure with AIG’s financial products unit in London, and the huge international financial ramifications, Congress is clearly looking to a federal agency to coordinate and oversee the insurance industry.
In fact, without putting words in their mouth, I believe the two consumer advocates quoted would probably be the first to endorse the passage in Congress of a uniform federal insurance law (if it could be constructed), as long as it would be fair for consumers, offering more consumer protection and enforcement than is currently provided by the state regulatory system. A cost-effective federal insurance law, applicable to all states, adopting national standards, would have a sole federal regulator at the head, and would take the best of state insurance law, deputizing state insurance departments, allowing states or regions to add legislation or regulations to cover specific state or regional issues.. Provided there was enough pro-consumer detail in the proposal, most consumer advocates would endorse a federal oversight law.
This article should have been headlined “Some Consumer Advocates Wary of Current Federal Insurance Regulation Plans” . Adding the word “Some” and the word “Current to the headline would have been closer to the opinions expressed. Or, reversing the emphasis, this article could have been headlined “Consumer Advocates Say Proper Federal Insurance Regulation Not on Table — Yet”
At last, some common sense about insurance regulation. It is heartening to finally see people acknowledging that since everything that is insured is local, insurance regulation should be local. Money may flow around the globe in seconds with the click of a mouse, but insured risks are fixed in place. That’s why banks are different from insurance companies.
It is also nice to see an acknowledgment that there is more than one insurance consumer activist in all of the United States — i.e., J. Robert Hunter is not the only one!
“…After the regulatory failure with AIG’s financial products unit in London, and the huge international financial ramifications, Congress is clearly looking to a federal agency to coordinate and oversee the insurance industry” I point out your comment EDGE because it is just that pairing of the condition with the “solution” that makes this whole thing impractical. First because it was not AIG’s insurance section that is underwater, nor is it the insurance section that required bailing out. The “solution” is in search of a problem; what Congress should stay on is a review of the banking industry. But let me point out that it was the banking industry which lobbied, successfully, to have the restraint taken off that engendered the current disaster. At the same time, even if these consumer advocates could be convinced of a need to regulate insurance at the federal level, special interest groups will water down any proposal to accommodate all concerned: nothing good will come of that. This is how politics is done in the US, attempting to please all, we’ll please no one but the banks who will avoid additional scrutiny by mudding the waters.