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NAIC Dismisses G-20’s Call for U.S. to Consider Federal Insurance Regulation

Connecticut Insurance Commissioner Tom Leonardi said a recent report released by the G-20’s Financial Stability Board, calling on the United States to move toward a federal regulatory system for insurance “simply ignores the strengths of the state-led regulatory system.”...
September 5, 2013

Connecticut Insurance Commissioner Tom Leonardi said a recent report released by the G-20’s Financial Stability Board, calling on the United States to move toward a federal regulatory system for insurance “simply ignores the strengths of the state-led regulatory system.” Leonardi, who is chair of the International Insurance Relations Committee of the NAIC, sided with industry representatives who say the report fails to account for the fact that all of the U.S. companies that suffered severe financial problems during the economic crisis of 2008 were regulated by the federal government. “To suggest that the answer to the financial crisis is more federal involvement in insurance regulation misses the mark,” Leonardi told Best’s News Service.

“To me, the facts dictate the complete opposite of what the report found,” Leonardi said. “The states did a great job in regulating insurance during the financial crisis.” That statement was bolstered recently by a Government Accountability Office (GAO) report that found actions taken by state and federal regulators and the National Association of Insurance Commissioners (NAIC) helped to limit the effects of the crisis.

The FSB report is “almost self-serving,” Leonardi said. “But I am not terribly concerned by it, frankly. I think it misses the mark, and if people aren’t willing to understand how our system works, they have more work to do.”

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