Speaking at the NAIC summer meeting in Seattle, two consumer advocates told insurance commissioners they would prefer to see regulation of insurance remain with the states, as opposed to a federal takeover. At the NAIC’s Regulatory Modernization Task Force, Sonja Larkin-Thorne, an NAIC funded consumer representative, and Amy Bach, executive director of United Policyholders said they support a continuation of state regulation, but would like to see some changes in transparency.
Ms. Larkin-Thorne said the advantage of state regulation is that consumers can have a conversation with regulators directly that would be impossible under a federal system. However, she said regulators need to do more at making policies more transparent and understandable for consumers. Ms. Bach urged the creation of a summary sheet for consumers that would be short and explain what the various parts of the policy mean. Some commissioners questioned the wisdom of such a move, saying it could pose legal problems over what a contract actually said.
August 24, 2010