You are here:HomeNews CenterInsurance News2010At NCOIL, Rights of States vs. NAIC's "Seat At the Table" Compromises Discussed

At NCOIL, Rights of States vs. NAIC's "Seat At the Table" Compromises Discussed

The National Conference of Insurance Legislators (NCOIL) was adamantly opposed to the creation of a federal insurance office, something that is about to become...
July 13, 2010

During a discussion of the creation of a Federal Insurance Office (FIO), state insurance legislators and state insurance regulators noted their differences on the issue.

The National Conference of Insurance Legislators (NCOIL) was adamantly opposed to the creation of a federal insurance office, something that is about to become law. The National Association of Insurance Commissioners (NAIC), after years in opposition, endorsed the creation of the new office and was a party to negotiations over language in the financial regulatory reform bill now before the U.S. Senate.

This prompted NCOIL President-elect and North Dakota state Rep. George Keiser to describe the contrasting approaches of NCOIL, which opposed a new federal office and the NAIC as "states' rights" versus "a seat at the table." Turning to the NAIC officials in the audience at the NCOIL meeting, Keiser said, "They [Congress] usurped our rights as a state and you were a part of it." Keiser went on to say that it will be up to him and NAIC President-elect Susan Voss to work together to maintain state supremacy over insurance matters.

NAIC Chief Executive Officer Therese M. Vaughan said during a panel discussion that now is the time for state officials to be vigilant to ensure the FIO doesn't exceed its mandate. NCOIL and NAIC members in attendance agreed that they need to work together to maintain the supremacy of state-based regulation.

What It Means to Agents: NCOIL's staunch and continuing opposition to any federal encroachment in insurance regulation is vital to keeping insurance state-regulated. At the same time, the NAIC achieved considerable success in reining in the new Federal Insurance Office by getting its preemption authority watered down. Both groups will need to work together going forward to prevent the FIO from expanding its authority. In fact, there was movement at this session to form a permanent joint NAIC-NCOIL working group. This is an idea that PIA National strongly supports and one we have been suggesting for several years. Our message to the NAIC and NCOIL has consistently been that they can accomplish many things by working together. But such cooperation does not mean that either organization should adopt the other's positions, or dilute their own strengths. For example, the two-track strategy NCOIL and NAIC pursued on FIO proved to be more effective than had they attempted to "speak with one voice."