FOR IMMEDIATE RELEASE

NAIC: STATE SAFEGUARDS KEY TO
REGULATORY REFORM
Federal Proposal Must Preserve Consumer Protections

WASHINGTON, D.C. (Oct. 6, 2009) — Expanding access to insurance sector information and enhancing international regulatory cooperation should protect and leverage strong state regulation of the industry, the National Association of Insurance Commissioners (NAIC) told Congress today.

Testifying before the House Financial Services Committee on the proposal to create an Office of National Insurance (ONI), the NAIC stated its support of the concept of increasing knowledge and access to information on insurance at the federal level. However, a proposed federal insurance office should most appropriately be a tool to connect the state regulatory system with the federal regulatory system, and not be an instrument to displace or diminish state insurance regulation.

“A formal federal interface is appropriate, but the current ONI proposal strays too far from past legislation that included important safeguards against preemption of state laws and consumer protections,” said Therese M. Vaughan, Ph.D., NAIC Chief Executive Officer.

Vaughan cautioned that while the proposed reform would increase insurance knowledge and expertise at the federal level and enhance international cooperation on regulatory matters, it could also encroach upon state insurance regulatory authority to an unacceptable degree, particularly in the area of federal preemption of state law. 

“Any binding discussion at the international level should respect and reinforce the states’ authority to regulate insurer solvency and protect insurance consumers, and therefore should be limited to agreements of regulatory equivalence or mutual recognition,” Vaughan testified. 

“It is critical that the federal government have access to insurance information in order to ensure that the United States is competitive with its foreign counterparts in global negotiations,” said Roger Sevigny, NAIC President and New Hampshire Insurance Commissioner. “At the same time, any state-federal regulatory cooperation agreement must leverage the successful state insurance regulatory system and not preempt state law except in extremely narrow circumstances.”

Click HERE to view Vaughan’s testimony.

Click HERE to view the NAIC’s suggested legislative improvements to the current ONI proposal.

 

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.

You are currently subscribed to the “NAIC News Release” electronic service. For information regarding this service, please contact the NAIC Communications Division, 2301 McGee Street, Kansas City, MO 64108, 816-783-8909.

To unsubscribe from NAIC Electronic Services, send a blank e-mail to
NAIC Opt Out services.