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Move to Close International Insurance Meetings Sparks Outrage

A major controversy has erupted concerning a proposal by the International Association of Insurance Supervisors—an organization of insurance supervisors and regulators from around the world—to close its meetings to outside observers...
August 27, 2014

A major controversy has erupted concerning a proposal by the International Association of Insurance Supervisors (IAIS)—an organization of insurance supervisors and regulators from around the world—to close its meetings to outside observers. Instead, it plans to keep its deliberations private and only invite select parties to the closed meetings when it wants their input.

The action by the IAIS comes as the group rushes to develop global capital rules for the insurance market. The first of these new proposed rules will be put to leaders of the Group of 20 economies, which includes the United States, for endorsement when they meet in November 2014.

The international group has been highly critical of the state-based system of insurance regulation in the United States, suggesting that the U.S. adopt a broader federal regulatory regime. This has brought sharp opposition from the National Association of Insurance Commissioners (NAIC); the National Conference of Insurance Legislators (NCOIL); multiple insurance trade associations such as the Property Casualty Insurers Association of America (PCI); the National Association of Mutual Insurance Companies (NAMIC); as well as members of Congress.

The proposal by IAIS to bar companies and trade groups from its meetings has sparked outrage. State insurance commissioners, industry groups and consumer representatives have united in opposition. The NAIC, an active IAIS member, will send comments criticizing the changes to the IAIS over the next few weeks.

Regulators and insurance companies spoke out against the IAIS action during the just-completed NAIC summer meeting in Louisville, Kentucky. "It becomes a competition of who can gain undue influence," David Snyder, vice president of international policy for the Property Casualty Insurers Association of America, told news service SNL. "This is an absolutely fundamental and critical crossroads." Connecticut Insurance Commissioner Thomas Leonardi added, "It is very disturbing, quite frankly."

What It Means to Agents: While IAIS action is not legally binding on U.S. states or U.S. companies, the organization is an immensely persuasive force, particularly on the regulation of globally active insurance groups. The proposal by IAIS to close its meetings is being viewed by some as an attempt to silence opposition from U.S regulators and other groups. PIA joins the NAIC, NCOIL, PCI, NAMIC, members of Congress and others in opposition to the IAIS's lack of transparency.

U.S. Regulators May Refuse to Apply Global Capital Standards (PIA 6/27/14)

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