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FOR IMMEDIATE RELEASE NAIC URGES NAIFA MEMBERS TO VOTE FOR CONSUMER PROTECTION KANSAS CITY, Mo. (April 18, 2008) — National Association of Insurance Commissioners (NAIC) President and Kansas Insurance Commissioner Sandy Praeger today issued the following statement in response to news that the Board of Trustees of the National Association of Insurance and Financial Advisors (NAIFA) voted to recommend support for the concept of the optional federal charter (OFC) for insurance: “NAIFA has been a long-standing supporter of the NAIC and the state-based system of insurance regulation. So, we are certainly surprised and disappointed that NAIFA’s board would suddenly change course on this important consumer-protection issue — especially without the benefit of having the full feedback and support of its 225,000 members. “Considering that this measure still needs to be voted on by the NAIFA membership at large — and the governing board’s decision refers to certain conditions that would need to be satisfied — we remain hopeful that NAIFA’s membership will ask its board to reconsider its position. “The plain and simple truth is optional federal chartering would create a new federal bureaucracy from scratch and allow insurance companies to ‘opt out’ of comprehensive consumer protections and state oversight. Current OFC proposals would gut consumer protection, while outsourcing most critical regulatory functions to an industry-run self-regulatory organization. “Indeed, insurance agents and financial advisors’ primary responsibility is to their clients, helping them make sound financial decisions that are in their best interest. As such, NAIFA’s members represent an important link between insurance companies and consumers. After considering the potential impact an OFC would have on their clients, NAIFA’s members will surely agree that an optional federal charter combined with consumer protections is like oil and water — they simply do not mix, even with myriad caveats. “While we realize there are still opportunities for improvement of the state-based system of insurance regulation, we believe the states are best positioned to provide solutions that promote consumer protection, streamline agent licensing, improve product speed-to-market and strengthen the competitiveness of the insurance industry. We look forward to continued dialogue with NAIFA on these issues.”
About the NAIC Headquartered in Kansas City, Mo., 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 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 www.naic.org/press_home.htm.
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©2008 National Association of Insurance Commissioners. All rights reserved. | ||
