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NAIC Begins Push to Promote State-based Insurance System

The National Association of Insurance Commissioners has kicked off a renewed campaign demonstrating the benefits of the nation's state-based regulatory system...
July 23, 2014

The National Association of Insurance Commissioners (NAIC) has kicked off a renewed campaign demonstrating the benefits of the nation's state-based regulatory system. It is undertaking the initiative, Protecting the Future, to fend off demands for a one-size-fits-all approach to U.S. insurance oversight by federal and international regulators.

The announcement of the initiative by the NAIC said that despite the U.S. system’s strong track record, “international forces and a few here at home are seeking unprecedented authority over the U.S. insurance industry ... seemingly forgetting that the state-based insurance regulatory system performed well during the 2008 financial crisis, while the federal banking regulatory system collapsed.”

The G-20’s Financial Stability Board (FSB) and the International Association of Insurance Supervisors (IAIS) are pushing for a one-size-fits-all, bank-centric regulatory regime which would include insurance companies.

“We shouldn’t default into the conventional wisdom that we should radically change things,” said NAIC Vice President and Pennsylvania Insurance Commissioner Michael Consedine, saying the new initiative will discuss why the state-based system worked during the financial crisis and “why it works for us.” Adds NAIC CEO Sen. Ben Nelson, “Let’s not replace a regulatory model we’ve seen work well with one we’ve seen fail spectacularly.”

Protecting the Future (video: NAIC CEO Ben Nelson)

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