| FOR IMMEDIATE RELEASE
KANSAS CITY, Mo. (April 16, 2008) — On behalf of the National Association of Insurance Commissioners (NAIC), New York State Insurance Superintendent Eric Dinallo testified today before the U.S. House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises about the states’ ongoing, successful efforts to improve insurance supervision.
“The state-based regulatory regime has been very effective for more than 150 years,” Dinallo said. “Insurance oversight has been rigorous, resulting in high regulatory compliance and avoiding the level of insolvencies and market meltdowns we have seen in other sectors of the U.S. financial community. Indeed, our national solvency system has ensured that companies have the wherewithal to pay claims while remaining competitive and profitable.”
Looking forward, Dinallo noted that insurance regulation must continue to stay up-to-date with changes in the industry — including the increasingly global nature of the insurance marketplace. He reiterated that state insurance regulators are actively developing proposals to modernize the state-based regulatory framework. And, he outlined several principles of reform, for areas where uniformity of process and harmonization of standards is imperative. Specifically, Dinallo noted:
Any option(s) adopted should include enforceable uniform standards in targeted areas of insurance regulation.
Any entity created to implement reforms or uniform standards should be developed and implemented by state regulators, who are the public servants closest to those whom insurance is designed to benefit. State regulators should both set the standards and enforce compliance.
Any option(s) adopted should include uniform standards made applicable to all states.
Any entity created should have an equal voice with other federal financial regulators and have some level of federal accountability.
Any entity created should be the primary U.S. contact for coordination with international insurance regulators.
Lastly, any reform effort that includes modernization of state laws and standardization should be taken over time, to allow for correction should the markets or consumers be placed in jeopardy.
“As the insurance industry has grown, the state regulatory community has adapted,” Dinallo said. “We have responded to this dynamic environment through increased uniformity, interstate collaboration, leveraging of technology and enhanced operational efficiencies.”
“State insurance regulators have made great strides in increasing market efficiencies while maintaining consumer protections,” added NAIC President and Kansas Insurance Commissioner Sandy Praeger. “We strongly caution against federal intervention in a state-based system that is working for consumers and industry alike.”
Click HERE to view the full text of Dinallo’s testimony.
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 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 at www.naic.org/press_home.htm. |
