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NAIC 'Uniformity' Plan Draws Skepticism and Fire

In a hearing at the fall meeting of the National Association of Insurance Commissioners (NAIC), regulators defended the National Insurance Supervisory Commission proposal as a...
September 29, 2009

In a hearing at the fall meeting of the National Association of Insurance Commissioners (NAIC), regulators defended the National Insurance Supervisory Commission proposal as a bid to preserve and enhance the state-based system - while some state legislators were vocal in the opposition to the idea.

The proposed Commission, a new entity through which states would adopt consistent rules, is a response to agitation by some in the industry and others for a federal insurance regulator. Acting through the commission, states would identify and develop standards for uniformity, then enact and enforce those rules. States would have a limited period to adopt these rules before the commission would formulate rules to be implemented by the federal government through a proposed Office of National Insurance within the Treasury Department.

Rhode Island state Rep. Brian Kennedy called the proposal not a carrot and stick, but a hammer. "I can't imagine a legislator in this room voting for this in their home states," said Kennedy, financial services committee chairman for the National Conference of State Legislatures.

Kentucky state Rep. Robert Damron, president-elect of the National Conference of Insurance Legislators (NCOIL), warned against cutting a deal with Congress - which he identified as "the enemy" - that could be seen as taking away authority from state lawmakers and regulators. Damron said commissioners and their governors run the risk of facing the same wave of opposition that members of Congress experienced at August town hall events on health care reform. "If we stay united, I don't think Congress is going to run over us," Damron said. "I think that eventually they'll just go away."

NAIC President Roger Sevigny said that with nearly 200 insurance bills introduced in the current Congress, there is strong support for some sort of reform and we can't ignore it. NCOIL Vice President and North Dakota state Rep. George Keiser said legislators see such an NAIC "super-compact" as an inappropriate response. "If we have an OFC [optional federal charter], we're out of the game. If we have this, legislators are out of the game," he said.

From PIA staff and wire service reports.