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Auerbach Addresses Issues at NCOIL Annual Meeting

The National Conference of Insurance Legislators (NCOIL) held its Annual Meeting in Florida November 19-23 and covered a range of critical issues, including the financial...
November 25, 2008

The National Conference of Insurance Legislators (NCOIL) held its Annual Meeting in Florida November 19-23 and covered a range of critical issues, including the financial crisis, producer licensing, federal regulation, and natural disaster preparedness.

PIA National President Ken Auerbach addressed the legislators on behalf of PIA and reiterated his pledge to continue working closely with them to modernize the state system. PIA National and our affiliates are working with the NAIC over the next several months as part of a nationwide effort to modernize producer licensing and we need the participation of the legislators in this nationwide effort. We are urging our members to contact their state legislators regarding licensing reforms, including full utilization of National Insurance Producer Registry (NIPR).

On November 22, the legislators hosted a panel entitled U.S. in Financial Crisis: Where Do We Go From Here?  Robert Easton, from the New York Insurance Department, defended state regulation by saying that the institutions under their regulatory authority remained strong. Carmen Balber, representing consumers, said that state regulation, while far from perfect, is by far the better regulatory system for consumers. John Brown, representing the Coalition Opposed to a Federal Insurance Regulator (COFIR), said that the states did an outstanding job of regulating insurance and that state regulators should perhaps be given more authority, not less.

Kevin McKechnie, representing the American Bankers Insurance Association (ABIA), and the Optional Federal Charter Coalition, said they might consider dropping the "optional" from their name. Doug Barnert, representing the Group of North American Insurance Enterprises (GNAIE), said that the states largely did a good job with their authority, although national and even some international solvency standards would be useful.

NCOIL's State-Federal Relations Committee, chaired by Representatives Greg Wren (AL) and Robert Damron (KY), lead a discussion of needed improvements to the state licensing system and Auerbach, along with John Gerni, ACLI, Bill Anderson, NAIFA, and Wes Bissett, IIABA, addressed the committee to give them an update on needed licensing reforms. 

Auerbach expanded on PIA's ideas to strengthen state regulation and therefore greatly diminish the perceived need for federal preemption. He reiterated PIA's desire to achieve our uniformity and reciprocity goals within the state system, while also working to improve upon the NARAB II proposal. Auerbach noted that a recent Justice Department letter confirmed many of the initial constitutional concerns raised by PIA, NCOIL and others. In the meantime, we must pursue true reciprocity on a state-by-state basis, he noted, adding that the process that PIA is pursuing in the states is not mutually exclusive of our efforts to perfect NARAB II.

Auerbach also noted that several federal officials are seeking to reassert the need to enact the Treasury's March, 2008 "Blueprint for a Modernized Financial Regulatory Structure" despite being light on details as respects insurance regulation and having been soundly rejected by Congress and the states. Finally Auerbach said that PIA agrees with the points that NCOIL raised in a recent letter to members of the House Financial Services and Senate Banking committees, urging them to use state regulation as a model for what worked. He stressed the need for PIA and NCOIL to work together in the coming months to achieve these modernization goals and remove any perceived need for federal intervention.