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Oxley, Nelson Urge NAIC to Speed Action on Reforms

Two influential Members of Congress accepted invitations to address the NAIC at the organization's just concluded summer meetings, and they emphasized a similar theme-speed up...
July 1, 2003

Two influential Members of Congress accepted invitations to address the NAIC at the organization's just concluded summer meetings, and they emphasized a similar theme-speed up action on regulatory reform, or face an increased threat of federal action. House Financial Services Committee Chairman Michael Oxley (R-Ohio) and Senator Ben Nelson (D-Nebraska) both said if state insurance regulators fail to speed up efforts to cut their procedural red tape, more federal regulation could be the result.

Nelson is a former director of the Nebraska DOI and also served as executive vice president of the NAIC before serving as governor of Nebraska and being elected senator. Oxley heads the House committee largely responsible for insurance regulatory matters.

Nelson said the NAIC needs to engage a "more urgent, energetic plan for modernization and reform." He warned, "I'd suggest that you draft your own set of standards and set a timetable for true implementation. Otherwise, you will be faced with reacting to the Congressional process." Oxley was only slightly less blunt, saying Congress "will continue to explore other avenues for reform while working with the states to improve the system from within." NAIC President Mike Pickens said it was good to hear Oxley express support of the states as "preferable agents for change," and stressed the importance of staving off federal regulation of insurance and the creation of an optional federal charter. Pickens said the way to do this is to push for greater regulatory modernization within each state, and greater uniformity across the states.

What It Means to Agents: PIA National is opposed to federal optional charters for insurance entities and the dual/parallel state-federal regulatory system that they require. PIA believes in functional state regulation and asserts that creating conflicting, competing federal-state insurance jurisdictions is both unneeded and counterproductive to effective oversight of the insurance industry.