AIG: POLICYHOLDERS PROTECTED UNDER
STATE REGULATORY AUTHORITY
Amid
continuing media and consumer confusion about American International
Group, Inc. (AIG) and the role of state insurance regulators,
the NAIC urges close examination of the facts.
AIG,
the world’s largest insurance company, owns 176 other companies, in
addition to 71 U.S. state-regulated insurance subsidiaries.
State insurance regulators have been involved actively in the AIG
situation to help ensure consumers remain protected. Despite
failings at its holding company, its insurance subsidiaries have
continued to fulfill their obligations to policyholders.
These
points were further underscored by Pennsylvania Insurance
Commissioner Joel Ario in testimony before a U.S. House
Financial-Services Subcommittee on Capital Markets, Insurance
and Government Sponsored Enterprises.
Ario
said AIG’s insurance companies remain strong as state regulation
serves to wall them off from high-risk activities engaged by AIG
Financial Products.
Click here for the full text of Ario’s testimony.
Click here for more information about the
regulatory response to AIG, including a Consumer Alert and consumer
FAQs.
AMERICANS BELIEVE
THEY ARE SAVVY ABOUT INSURANCE, BUT NAIC’S INSURANCE IQ SURVEY TELLS
DIFFERENT STORY
A
new survey commissioned by the NAIC suggests that most Americans
would flunk a basic insurance IQ test even though most believe they
would pass the 10-question test.
This
disparity is worrisome since, in today’s weak economy, one-third of
Americans are considering making changes to their insurance policies
and 40 percent are mulling a switch in their providers, the survey
revealed. Their desire to make changes appears to reflect a goal to
save money or better protect themselves with a different carrier.
Consumers,
though, must do their homework before making any changes. For
instance, reducing insurance premiums by assuming a higher
deductible might prove costly if a claim is submitted and the
policyholder can’t pay the deductible.
The
survey of 1,000 American adults ages 18 and older also found that:
| |
- Most
feel “very confident” when making insurance decisions,
although nearly half admit they get confused when
determining how much coverage they need.
- Less
than half know if they leave their job but continue their
health benefits with COBRA, they must pay the full cost of
coverage. President Obama’s new stimulus bill provides
workers who are involuntarily terminated a 65 percent
subsidy for COBRA continuation.
- Forty
percent are unaware of all factors that can affect the cost
of auto insurance; and 44 percent believe wrongly that their
auto insurance policy covers a rental car.
|
The
NAIC’s "Insure U" consumer-education Web site, www.insureUonline.org, serves as an expert
resource for consumers to obtain the types of insurance available,
the factors that can affect the cost of coverage, and how their
personal life situation dictates their insurance needs.
Click here to learn more about NAIC’s IIQ survey
and to test your own insurance IQ.
INSURANCE
LEGISLATION: OUR PRINCIPLES PUT CONSUMERS FIRST
NAIC
serves as a full partner in congressional efforts to stabilize the
nation’s financial-services sector and modernize the insurance
regulatory structure. State insurance regulators support reforms
that protect insurance consumers and preserve a solvent insurance
marketplace.
Financial
Stability
State insurance regulators
recognize that federal action can manage systemic risk within the
nation’s financial marketplace. We support these principles for
financial stability reform:
| |
- Consumer
access to state-based regulatory officials.
- Formalized
state and federal collaboration to regulate financial
conglomerates.
- Limited
and extraordinary federal financial-stability regulatory
authority.
|
Modernization
For 150 years, we have continually improved and
strengthened the state insurance regulatory system. Fresh reforms
must incorporate these principles:
| |
- Uniform
standards where appropriate; local or regional where
necessary.
- Continued
state responsibility for standard setting and enforcement as
well as managing taxes and fees.
- Equal
standing for state insurance regulators with other
regulators; formalized collaboration with federal
financial-services regulators and full participation in
information sharing.
- Collaboration
with international insurance and financial-services
regulators on matters related to the U.S. insurance
marketplace.
|
We
and Congress are working to ensure that any legislative changes
protect the consumer – and preserve the strengths of our state-based
insurance regulatory system.
Recently,
Dr. Vaughan outlined the membership’s principles on
financial-services regulatory reform at a House Financial Services
Subcommittee hearing on systemic risk. She argued that any structure
created to regulate financial stability must integrate, but not
displace, state-based system of insurance regulation. "The nation's
insurance markets represent an island of relative stability in an
otherwise chaotic and troubled financial sea,” she said, crediting
states’ strong solvency protections.
Dr.
Vaughan pledged the NAIC’s willingness to serve as a resource as
Congress analyzes the current financial landscape.
Click here to view the full text of Dr. Vaughan’s
testimony. |
