INSURANCE REGULATORS URGE CONGRESS TO CAPITALIZE ON
Regulatory and Health
Care Reform Must Tap State Expertise
WASHINGTON, D.C. (May 20, 2009) - The
state-based insurance regulatory system has remained a constant in
an otherwise erratic economic climate. That was the key message
conveyed this week when state insurance regulators visited members
of Congress to highlight the part of the regulatory system that has
More than 35 state insurance
commissioners joined National Association of Insurance Commissioners
(NAIC) Chief Executive Officer Dr. Therese M. (Terri) Vaughan for
meetings with members of Congress to discuss insurance regulatory
reform. Commissioners also heard from Congressman Barney Frank
(D-MA), chairman of the House Committee on Financial Services on his
views for financial regulatory reform; from Health and Human
Services Secretary Kathleen Sebelius on health insurance reform; and
from Congressman Earl Pomeroy (D-ND) on his perspective as a former
NAIC President and North Dakota Insurance Commissioner.
During the meetings, Dr. Vaughan and state regulators
stressed that any reforms must provide consumers with the
time-tested protections of the current national system of state
"It is imperative that we preserve and
build upon the successful model of our national state-based
regulatory system," said Dr. Vaughan. "The American people want more
financial stability, not less. Reform proposals must ensure
consumers have accountable and local regulators who can provide
continued stability despite these challenging economic times. State
insurance regulators work hard every day to make sure that insurers
honor their promises to policyholders."
"Any reform framework
must integrate, but not displace our current state-based system of
insurance regulation," she continued. "It must serve to further
safeguard the assets of the insurance companies these regulators
oversee so the companies can meet their obligations to the
individuals and businesses who, as policyholders, have put their
trust in them. We have continually improved and strengthened the
state insurance regulatory system for more than 150
NAIC President and New Hampshire Insurance
Commissioner Roger Sevigny said the visits were designed to ensure
careful consideration of reforms to the nation's financial services
"As Congress works to address the
current financial turmoil, we want to make sure the comprehensive
national system already in place - the existing state-based
insurance regulatory system - is given full consideration and
review," Sevigny said.
Sevigny further noted that, as a
whole, the business of insurance has not posed systemic risk to the
nation's economy, instead providing a source of relative calm in an
otherwise turbulent time. State insurance solvency oversight has
kept insurance companies stable and protected policyholders from the
worst of the financial meltdown, and state regulators continue to
provide a local response to consumer issues at no cost to federal
"While we agree that reforms are needed, we
believe that federal and state regulators should work together in a
way that continues to protect consumers and promote financial
stability. There are areas in which we might need federal
assistance, but that assistance should streamline the strong
state-based regulatory framework - not supplant it with a new
federal bureaucracy," Sevigny said.
regulators also shared with members of Congress the NAIC principles
for health insurance reform, which stress substantial experience and
expertise of the states in the crafting of federal legislation.
"States already have many patient protections, solvency
standards and fraud prevention programs in place that should not be
preempted by the federal government," said Kansas Insurance
Commissioner Sandy Praeger, who also chairs the NAIC's Health
Insurance and Managed Care Committee.
"We encourage the
development of broad standards rather than prescriptive rules
wherever possible to maximize state flexibility to implement reforms
in a manner that is responsive to local and regional market
conditions. States must be allowed to go beyond the minimum
standards to protect consumers."
About the NAIC
Formed in 1871, 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 has three offices: Executive Office, Washington,
D.C.; Central Office, Kansas City, Mo.; and Securities Valuation Office,
New York City. The NAIC serves the needs of consumers and the industry,
with an overriding objective of supporting state insurance regulators as
they protect consumers and maintain the financial stability of the
insurance marketplace. For more information, visit www.naic.org.
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