You are here:HomeNews CenterPIA Press Releases2009PIA Advocates for State Insurance Regulation During White House Meeting on Regulatory Reform

PIA Advocates for State Insurance Regulation During White House Meeting on Regulatory Reform

WASHINGTON, June 9, 2009 - The National Association of Professional Insurance Agents (PIA) spoke in favor of maintaining the state-based system of insurance...
June 9, 2009

WASHINGTON, June 9, 2009  - The National Association of Professional Insurance Agents (PIA) spoke in favor of maintaining the state-based system of insurance regulation during an industry meeting on June 4 with Treasury Department and Commerce Department officials at the White House.

The meeting was the first between Administration officials and industry representatives focused primarily on the insurance aspects of financial services reform legislation currently being drafted by Treasury.

"Some of our industry colleagues here today are proponents of federal regulation of insurance. We disagree," noted PIA National Executive Vice President & CEO Leonard C. Brevik. "Main Street agents who are members of PIA strongly support state regulation of insurance."

Brevik noted that in the early 1990's, state insolvency and guaranty fund laws went through a massive revamping with positive results. 

"In the 1980's there was a higher rate of insurer insolvencies," Brevik said. "As a result, state regulators through the National Association of Insurance Commissioners (NAIC) significantly strengthened the existing state insurance solvency system by developing a series of model laws that formed an improved infrastructure for success. In 2000, there were 56 companies under state supervision. But by 2004, that declined to 19 and by 2006 there were just eleven."

"This is a significant record of success for our national system of state-based insurance regulation," Brevik said. "It has better protected insurance policyholders and supported the financial soundness of our industry, in contrast to what was experienced in the recent financial crisis on the federal level."

Brevik added that Administration officials would benefit from studying the state system of insurance regulation, to draw lessons from why it succeeded during the financial crisis while federal regulation of the other sectors of financial services failed.

Among the groups attending the June 4 meeting were the National Association of Insurance Commissioners (NAIC); the Property Casualty Insurers Association of America (PCI); the American Insurance Association (AIA); of the National Association of Insurance and Financial Advisors (NAIFA); the Council of Insurance Agents & Brokers (CIAB); the Financial Services Roundtable; the Reinsurance Association of America (RAA); the Property Casualty Insurers Association of America (PCI); the American Council of Life Insurers (ACLI); the National Association of Mutual Insurance Companies (NAMIC); and IIABA.

Background on PIA's position:

PIA members support Congressional efforts to address the systemic regulation of the major players in financial services, as long as they do not undercut our state insurance regulators, or undermine state insurance law. Congress needs to focus its regulatory reform efforts on the areas where the problems occurred: in banking, securities and capital markets.

In the weeks prior to the White House meeting, PIA applauded President Obama for issuing a memorandum to federal departments and agencies reining in administrative preemptions of state laws.

PIA believes it is also important to focus on the risks posed by unregulated sectors and activities - the new components of the financial system that have evolved more quickly than did the regulations to properly supervise them - such as derivatives and credit default swaps.

PIA looks forward to the upcoming release of the Administration's white paper on reforming the financial services sector and to submitting our comments and suggestions for the further consideration, at the request of the Administration.

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street America(SM). PIA's web address is www.pianet.com.

Filed under: