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Superintendent Alessandro Iuppa's Remarks for PIA's Federal Legislative Summit

Let me begin by thanking PIA members for this opportunity to share my comments directly with you, to coincide with your 2006 PIA Federal...
April 24, 2006

By Alessandro Iuppa
President, National Association of Insurance Commissioners (NAIC)

Let me begin by thanking PIA members for this opportunity to share my comments directly with you, to coincide with your 2006 PIA Federal Legislative Summit in Washington, D.C. The NAIC appreciates the close working relationship it has enjoyed with PIA throughout the years. The members of PIA are an integral part of America's insurance distribution system, and steadfast supporters of our state system of insurance regulation. We appreciate your continuing support.

After 135 years supervising insurance markets, state insurance commissioners understand that real progress does not come with simple solutions. Therefore, when the members of the National Association of Insurance Commissioners (NAIC) set out to retool the state system of insurance regulation to meet the needs of the modern financial marketplace, we knew well the challenges that we faced.

Now, six years after the "Statement of Intent" and three years into the "Insurance Regulatory Modernization Action Plan," we can point to major reforms that already have improved the way the business of insurance is supervised. Better yet, we can see the broader vision of reform taking shape in the years ahead.

The Interstate Compact for life insurance and other investment-oriented insurance products is on the verge of becoming a reality. With 23 states on board and more on the way, we expect to reach the 26 state threshold to begin operations by the end of the year and be up and running in early 2007.

The one-stop, single point of electronic filing for insurance products - SERFF - is the ultimate answer to insurers speed-to-market concerns. All states are SERFF-ready, and the companies that choose to file rates and forms electronically experience an average 23-day turn-around time. That includes the entire filing submission and review cycle.

The states continue to seek improvements that will result in more harmonized company licensing procedures; a strengthened solvency regime based on lead state deference; and a coordinated consideration of mergers and acquisitions. We have begun to make real progress coordinating market conduct analysis and exams - although more work is required in this key area.

NAIC also supports state legislative efforts to place greater reliance on competition to regulate property and casualty insurance markets. About half the states have re-engineered commercial lines regulations to exempt large commercial risks, and a full 43 states have implemented competitive rating for some or most commercial risks.

These are real achievements that help to bring the state based insurance regulatory framework into the 21st century without sacrificing insurance supervision's paramount objectives - to protect policyholders and ensure the financial solvency of the insurance industry.

The critical point is that regulatory modernization is dynamic. As insurance commissioners make progress, our efforts evolve as we take stock, work with others and incorporate new elements and developments.

No area better underscores this process than our producer licensing efforts.

The NAIC's Modernization Plan sets the broad, long-term goals to implement a uniform, electronic licensing system for individual and agencies that sell, solicit or negotiate insurance. Our specific initiatives have had great success:

  • Functional reciprocity in almost all states,
  • National Insurance Producer Registry (NIPR),
  • Uniform applications,
  • Streamlined continuing education (CE) course approval,
  • Common definitions for limited lines, and
  • Electronic filing and appointments.

Each step forward, however, also reveals new areas to explore.

Under the leadership of Commissioner Susan Voss of Iowa and Laurie Wolfe of North Dakota, the NAIC Market Regulation and Consumer Protection (D) Committee and the Producer Licensing (D) Working Group are venturing outside the box to identify and find solutions to the full universe of licensing and registration requirements with which agents, brokers and agencies must comply. This new initiative, which will include coordinating with state officials outside the insurance regulatory system, is a direct result of ongoing dialogue that keeps us on target to meet evolving needs.

The goal is to identify and address all barriers to a streamlined, uniform producer licensing system.

The steadfast commitment to modernize is so ingrained into the NAIC mindset that the ongoing pursuit is embedded in our motto: "Making Progress…Together!"  These three simple words, which underline the organization's initials on the NAIC logo, provide a constant reminder that state efforts continue to produce tangible results and that each individual step forward is part of a broader vision of reform.

Alessandro Iuppa is Superintendent of the Maine Bureau of Insurance and President of the National Association of Insurance Commissioners.

PIA Connection

This article originally appeared in the April 2006 PIA Connection.