As an agent and citizen, I am categorically opposed to any intervention by the Federal Government into our business. We know how bad they are at their jobs in every other arena they stick their nose in. Our government is massive and intrusive and we need a reduction in bureaucrats, not an increase as this would certainly be. Our States should be left in charge to police Insurance companies and agents.
I am the immediate past National Chairman of the CPCU Society’s Agent and Broker Interest Group but the following comments are my own. The Society is bared by its charter from taking political action.
I strongly agree with Len Brevek the the FIO should not be the one to do this study and I further do not think that it should be done by the GAO either. It is something , in my personal opinion, that should be undertaken as an academic endeavor.
There are several qualified insurance/risk management degree programs at respected academic centers with a lot of talented students in those insurance programs who have the skill sets to understand insurance on many planes. Some will work for agencies and some for companies when the graduate. At this point in their cariers they are not tainted by outside pressures.
A bid procedure should be set up to award scholarships to pursue such a study that will culminate in pier reviewd papers covering the streamlining of insurance regulation where it is appropriate and enhancing it where it is currently found to be inadequate. Such studies will most likely also be more cost effective.
I met several very savvy and motivated insurance students who attended last year’s CPCU annual meeting on scholarship. These individuals have a drive and energy level that was exciting to encounter. Providing funding to enable people of this caliber to pursue such a study that would also ease the cost burden of their education would be a win win situation .
It seems intuitive that consolidating state departments of insurance into one federal department of insurance would greatly reduce the current massive national insurance bureacracy and its cost, which is duplicated across 50 states. In addition, the consolidation of 50 state departments of insurance rules and regulations would provide increased opportunities for agents and insurance companies to operate across state lines by reducing red tape and reducing costs. It would also help reduce the insurance industry’s huge corporate bureacracies and high expense ratios. In the end, agents, companies and policyholders will all benefit with streamlined policy contracts and premium savings.
It is axiomatic that the AIA would support more power for the FIO, as they support the Federal Charter initiative. As captives with protected and semi-protected books of business and being unable to establish multi-location agencies, they believe this could only help the companies they represent without hurting their books of business. Further, the large national direct writers that also participate in that organization also believe they would benefit. Of course, much like the health insurers with regard to Obamacare, they fail to grasp that they will eventually be faced with the unrealistic socialist mandates and limitations on their profitability that all heavily federal regulated industries become straddled with.
Over the last 15 – 20 years the NAIC has done a great job of bringing uniformity to regulation and efficiency to licensing, while still leaving the wiggle room needed to accomodate local concerns and issues. Ask yourself what a federal solution to the homeowners insurance crises in Louisiana, Mississippi, Texas, and Florida in the wake of the 2004-2005 hurricane seasons would look like. I dare say it would more closely resemble Florida’s debacle rather than Louisiana’s success.
Want another issue to prove the point? Ask all of the health insurance agents around the country how they intend to survive on the new, drasitcally lower commissions resulting from the expense ratio requirements of Obamacare. Does anyone think Obama is going to allow them to charge fees for their services? You can ask the doctors under Medicare/Medicaid about that’s working for them. (Oops, I forgot – captive agents are already used to living the pittance magnanamously doled out by their companies.) In fact, we all just need to sit back and watch the health insurance sector for a couple of years to see EXACTLY what the federal regulation of P&C would look like. After all, should we really discriminate against drivers with bad records? Isn’t that unfair?
As inefficient as the current system may be, it’s cost will pale in comparison to what a federal system will eventually grow into. We will end up with another bloated bureaucracy that stifles competition, is unresponsive to local needs and conditions, and exercises dictatorial power over those players profitable enough to pay off congress and regulators. (Yes, some do forget that the 50 systems we have now do make it very hard for any one company or national agency to unduely influence regulators.)
For those who think FIO should be allowed to aggrandize power for their own short-term gain, be careful what you wish for. Federal regulation will put you in the position of the male black widow spider – you’ll have your brief time of ecstasy, and end up as lunch.
Many insurance companies do like state regulation. For one thing, state-by-state regulation minimizes the impact an unreasonable regulatory regime can have.
Some of the advocates of federal regulation tout the uniformity of regulation as a bonus, but what if that uniformity is like the systems in Florida, California, or Massachutsetts?
In today’s economy, with today’s top-heavy political agendas, national regulation seems inevitable. Of course, it will eliminate competition, eliminate smaller regional insurance companies with outstanding service, and leave the insurance markets dependant on supply side pressures from reinsurers, wkthout the same degree of regulation. But, hey, don’t we hear the same people say that we need less government, so we’ll eliminate all the redundant state insurance regulators, liquidation bureaus, etc. etc. and move regulation into one efficient [sic] federal bureaucracy. It just makes the lay policyholder feel comfortable and safe…until they look at where their earnings are ending up, both personal and commercial.
i must add that I agree with all those whom note a clear conflict of interest here…obviously, the branch desiring to regulate an industry should not be paid to study whether the regulatory structure and authority should be promulgated!
As an agent and citizen, I am categorically opposed to any intervention by the Federal Government into our business. We know how bad they are at their jobs in every other arena they stick their nose in. Our government is massive and intrusive and we need a reduction in bureaucrats, not an increase as this would certainly be. Our States should be left in charge to police Insurance companies and agents.
I am the immediate past National Chairman of the CPCU Society’s Agent and Broker Interest Group but the following comments are my own. The Society is bared by its charter from taking political action.
I strongly agree with Len Brevek the the FIO should not be the one to do this study and I further do not think that it should be done by the GAO either. It is something , in my personal opinion, that should be undertaken as an academic endeavor.
There are several qualified insurance/risk management degree programs at respected academic centers with a lot of talented students in those insurance programs who have the skill sets to understand insurance on many planes. Some will work for agencies and some for companies when the graduate. At this point in their cariers they are not tainted by outside pressures.
A bid procedure should be set up to award scholarships to pursue such a study that will culminate in pier reviewd papers covering the streamlining of insurance regulation where it is appropriate and enhancing it where it is currently found to be inadequate. Such studies will most likely also be more cost effective.
I met several very savvy and motivated insurance students who attended last year’s CPCU annual meeting on scholarship. These individuals have a drive and energy level that was exciting to encounter. Providing funding to enable people of this caliber to pursue such a study that would also ease the cost burden of their education would be a win win situation .
I agree 100% with the last comment!!!!!!!!!!!!!!!
Gov should stop trying to control everything like a caring parent!
There is one big difference…the Government doesn’t care!!!
Amen!
It seems intuitive that consolidating state departments of insurance into one federal department of insurance would greatly reduce the current massive national insurance bureacracy and its cost, which is duplicated across 50 states. In addition, the consolidation of 50 state departments of insurance rules and regulations would provide increased opportunities for agents and insurance companies to operate across state lines by reducing red tape and reducing costs. It would also help reduce the insurance industry’s huge corporate bureacracies and high expense ratios. In the end, agents, companies and policyholders will all benefit with streamlined policy contracts and premium savings.
It is axiomatic that the AIA would support more power for the FIO, as they support the Federal Charter initiative. As captives with protected and semi-protected books of business and being unable to establish multi-location agencies, they believe this could only help the companies they represent without hurting their books of business. Further, the large national direct writers that also participate in that organization also believe they would benefit. Of course, much like the health insurers with regard to Obamacare, they fail to grasp that they will eventually be faced with the unrealistic socialist mandates and limitations on their profitability that all heavily federal regulated industries become straddled with.
Over the last 15 – 20 years the NAIC has done a great job of bringing uniformity to regulation and efficiency to licensing, while still leaving the wiggle room needed to accomodate local concerns and issues. Ask yourself what a federal solution to the homeowners insurance crises in Louisiana, Mississippi, Texas, and Florida in the wake of the 2004-2005 hurricane seasons would look like. I dare say it would more closely resemble Florida’s debacle rather than Louisiana’s success.
Want another issue to prove the point? Ask all of the health insurance agents around the country how they intend to survive on the new, drasitcally lower commissions resulting from the expense ratio requirements of Obamacare. Does anyone think Obama is going to allow them to charge fees for their services? You can ask the doctors under Medicare/Medicaid about that’s working for them. (Oops, I forgot – captive agents are already used to living the pittance magnanamously doled out by their companies.) In fact, we all just need to sit back and watch the health insurance sector for a couple of years to see EXACTLY what the federal regulation of P&C would look like. After all, should we really discriminate against drivers with bad records? Isn’t that unfair?
As inefficient as the current system may be, it’s cost will pale in comparison to what a federal system will eventually grow into. We will end up with another bloated bureaucracy that stifles competition, is unresponsive to local needs and conditions, and exercises dictatorial power over those players profitable enough to pay off congress and regulators. (Yes, some do forget that the 50 systems we have now do make it very hard for any one company or national agency to unduely influence regulators.)
For those who think FIO should be allowed to aggrandize power for their own short-term gain, be careful what you wish for. Federal regulation will put you in the position of the male black widow spider – you’ll have your brief time of ecstasy, and end up as lunch.
Divide and conquer!! I really believe insurance companies like state regulation.
Many insurance companies do like state regulation. For one thing, state-by-state regulation minimizes the impact an unreasonable regulatory regime can have.
Some of the advocates of federal regulation tout the uniformity of regulation as a bonus, but what if that uniformity is like the systems in Florida, California, or Massachutsetts?
This country does not want socialism, why do they keep trying to force all this on us.
In today’s economy, with today’s top-heavy political agendas, national regulation seems inevitable. Of course, it will eliminate competition, eliminate smaller regional insurance companies with outstanding service, and leave the insurance markets dependant on supply side pressures from reinsurers, wkthout the same degree of regulation. But, hey, don’t we hear the same people say that we need less government, so we’ll eliminate all the redundant state insurance regulators, liquidation bureaus, etc. etc. and move regulation into one efficient [sic] federal bureaucracy. It just makes the lay policyholder feel comfortable and safe…until they look at where their earnings are ending up, both personal and commercial.
i must add that I agree with all those whom note a clear conflict of interest here…obviously, the branch desiring to regulate an industry should not be paid to study whether the regulatory structure and authority should be promulgated!