You are here:HomeNews CenterPIA Press Releases2009PIA Applauds Obama Administration's Decision to Leave State Regulation of Insurance Intact

PIA Applauds Obama Administration's Decision to Leave State Regulation of Insurance Intact

WASHINGTON, June 18, 2009 - The National Association of Professional Insurance Agents (PIA) is pleased that the Obama administration's Treasury report on regulatory...
June 18, 2009

WASHINGTON, June 18, 2009  - The National Association of Professional Insurance Agents (PIA) is pleased that the Obama administration's Treasury report on regulatory reform released June 17 leaves state regulation of insurance intact and does not propose federal regulation.

"PIA is pleased to see that the Administration's regulatory reform proposals leave the state-based system of insurance regulation intact," said PIA National Executive Vice President & CEO Leonard C. Brevik. "We are also pleased that the Administration did not endorse an optional federal charter and appears to recognize the fact that the state system of insurance regulation has worked well to protect policyholders and carriers."

Brevik added that the Treasury report recognizes that AIG is a financial services holding company, with insurance entities that were well regulated by the states and remain sound, and one non-insurance subsidiary that was poorly regulated by the federal Office of Thrift Supervision (OTS) that created massive losses.

"We remain skeptical of the Administration's proposed creation of an Office of National Insurance (ONI) which, as described, sounds similar to the Office of Insurance Information (OII) proposed by Rep. Paul Kanjorski (D-Pa.)," Brevik said. "While we would like to believe that the proposed Office of National Insurance (ONI) will not be used to advance federal insurance regulation, we have serious reservations about creating a federal bureaucracy for insurance."

"The needed reforms to increase efficiency should be made within the state-based insurance regulatory system, in accordance with state insurance law," he said. "The states have a proven track record of success in maintaining market stability and providing consumer protection. It is no accident that the insurance industry is so successful. In large part, it is the result of prudent, state-based supervision with the right mix of checks and balances. We need to build on that success."

Brevik said that overall, PIA views the Treasury report with optimism. "It seems to recognize that federal regulatory reform efforts need to focus on the areas where prudent regulation was lacking: in banking, securities and capital markets."
 
"Our main concern is that the seeds for federal regulation of insurance at some point in the future are not planted now," he said. "As a strong supporter of state insurance regulation, PIA will work going forward to assure that the insurance aspects of regulatory reform legislation do not lay the groundwork for future federal regulation, either unintentionally or by design."

In a pivotal meeting with industry representatives held on June 4 at the White House, the industry was divided on the issue of federal insurance regulation. Subsequently, federal regulation was not proposed in the Treasury report. PIA participated in the White House meeting, with Brevik among those speaking most forcefully in support of state regulation of insurance.

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: