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NCOIL Discusses Regulatory Proposals

The primary focus at the just-completed meetings of the National Conference of Insurance Legislators (NCOIL) July 10-13 was on maintaining state regulation of insurance and...
July 15, 2003

Flanders Briefs on PIA Position

The primary focus at the just-completed meetings of the National Conference of Insurance Legislators (NCOIL) July 10-13 was on maintaining state regulation of insurance and avoiding an optional federal charter. The meetings included extensive discussions regarding Senator Hollings' proposal to federalize insurance regulation.

Reflecting concerns similar to those of PIA, NCOIL advocates that state regulation of insurance is better than federal charter options because the state legislators and regulators are closer to the "grassroots" and thus are more keenly aware of what is needed in their respective states and are better able to respond to the concerns and problems of consumers. None of the federal charter proposals include sufficient resources to handle the day-to-day personal grievances that customers may have with their insurance carriers. Furthermore, federal charter proposals would divert state premium tax revenues away from the states to the federal government. These revenues constitute a significant portion of the budgets of several states, including many that already have very tight budgets.

In conversations with legislators, Don Flanders explained the differences between PIA's proposal and proposals for optional federal chartering, stressing that premium tax revenue would not be diverted to the federal government from the states.