Hopes the National Association of
Insurance Commissioners (NAIC) may have had that its proposal to
create a National Insurance Supervisory Commission (NISC) would be
well received were dashed by a number of US insurance industry
bodies which have condemned it as an unacceptable compromise
between state and federal regulation.
One of the strongest condemnations of the
proposed NISC came from the National Conference of Insurance
Legislators (NACOIL), a body focused on championing the cause of
state insurance regulators.
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“We have grave and fundamental concerns with
the substance, process, and politics of this proposal,” NACOIL
stressed in its written response to the NAIC.
According to NACOIL, the NISC would oversee
insurance regulation without further state legislative action in
many areas, such as producer and company licensing, life insurance
and other asset-based products, surplus lines and potentially
market conduct, solvency regulation, and reinsurance.
NACOIL continued that the NISC would channel
state information to a potential federal insurance office that
would supersede state insurance regulation in states that do not
comply.
In their written comment to the NAIC six
senior NACOIL executives, including its president Robert Damron and
president-elect George Keiser, stressed: “Your willingness to turn
your back on the state-based system and join with the federal
government to secure a seat at the proverbial table is
alarming.
“We feel that by forming an alliance with a
federal insurance office, the NISC lays another paving stone in the
path toward federal regulation of insurance – one that will leave
states and taxpayers holding the bag. NACOIL does not believe the
federal government will get just a little involved.”
