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FOR IMMEDIATE RELEASE NAIC ADDRESSES SENATE BANKING COMMITTEE ON INSURANCE REGULATION REFORM WASHINGTON, D.C. (July 11, 2006) – The future success of insurance supervision rests in the continued system of state regulation, National Association of Insurance Commissioners (NAIC) President Alessandro Iuppa told members of the United States Senate Committee on Banking, Housing, and Urban Affairs today in Washington, D.C. Speaking on behalf of the NAIC, Iuppa, who is the Maine Superintendent of Insurance and the Chairman of the Executive Committee of the International Association of Insurance Supervisors (IAIS), outlined to committee members the need to retain a coordinated, national system of state-based insurance supervision, which would continue to meet the needs of the modern financial marketplace while effectively protecting individual and commercial policyholders. “State insurance supervision is dynamic, and state officials work continuously to retool and upgrade state oversight to keep pace with the evolving business that we oversee,” said Iuppa. “NAIC members have modernized the state system across the regulatory spectrum to implement multi-state platforms and uniform applications. We have leveraged technology and enhanced operational efficiency while preserving the benefits of local protection, which is the real strength of the state system.” Iuppa said that any consideration of insurance must begin with an understanding that insurance products are fundamentally different from banking and securities products and, consequently, the state-based system has evolved over the years to address these fundamental differences. “Insurance products can generate a high level of consumer backlash and customer dissatisfaction that requires a high level of expertise, accountability and responsiveness,” Iuppa said. “State officials are best positioned to respond quickly and to fashion remedies that are responsive to local conditions. We are directly accountable to consumers who live in our communities, and can more effectively monitor claims-handling, underwriting, pricing and marketing practices.” Iuppa cautioned the Committee to avoid undercutting state authority in considering any federal legislation that would preempt important consumer protections. “Federal laws that appear simple on their face can have devastating consequences for state insurance departments trying to protect the public,” he said. “A bifurcated regulatory regime with redundant and overlapping responsibilities will result in policyholder confusion, market uncertainty, and other unintended consequences that will harm individuals, families and businesses that rely on insurance for financial protection,” Iuppa said. “The Senate Banking Committee and Congress should reject the notion of a federal insurance regime. “When our record of success is measured against the uncertainties of changing a state-based system that works well, at no cost to the federal government, state insurance officials believe that Congress will agree that supervising insurance is best left to home state officials who have the expertise, resources, and experience to protect consumers in the communities where they live.” Iuppa also updated the committee on various key initiatives, including the success of the Interstate Insurance Product Regulation Compact, the System for Electronic Rate and Form Filing (SERFF), the National Insurance Producer Registry (NIPR), and other market and financial regulatory initiatives. Copy of Alessandro Iuppa's Senate Banking Committee testimony [PDF]
About the NAIC About the NAIC Headquartered in Kansas City, Missouri, the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and the five U.S. territories. The NAIC’s overriding objective is to assist state insurance regulators in protecting consumers and helping maintain the financial stability of the insurance industry by offering financial, actuarial, legal, computer, research, market conduct and economic expertise. Formed in 1871, the NAIC is the oldest association of state officials. For more than 135 years, state-based insurance supervision has served the needs of consumers, industry and the business of insurance at-large by ensuring hands-on, frontline protection for consumers, while providing insurers the uniform platforms and coordinated systems they need to compete effectively in an ever-changing marketplace. For more information, visit NAIC on the Web at: http://www.naic.org/press_home.htm
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2006 National Association of Insurance Commissioners. All rights reserved. |
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