State legislators and regulators are saying that it is imperative that they work together to prevent federal encroachment over insurance regulation.
The grim warning was made during the summer national meeting of the National Conference of Insurance Legislators, Troy, N.Y. And, a call was made for legislators and regulators to put aside past differences and really work together to weigh in on issues where the case for state authority can still be made.
Rep. Bob Damron, D-Nicholasville, Ky., and NCOIL president, said that it is “imperative” that NCOIL and the National Association of Insurance Commissioners, Kansas City, Mo., focus on working together on issues such as producer licensing. If more can’t be done, the “clout” of federal preemption could minimize the ability of state legislators and regulators to help consumers, he added.
“We always say that we want to work together. We have got to mean it now,” said New York state Sen. James Seward, R-51st senate district. If that doesn’t happen, he said that he predicts the Federal Insurance Office will “fill out any vacuums out there. We are at a very critical time.”
The discussion focused on why the time is critical: the passage of the Dodd-Frank Act (HR 4173), as well as the likelihood of a large turnover in state insurance commissioners, governors and state legislators.
Terri Vaughan, president and CEO of the NAIC, expressed frustration that in spite of all regulators’ efforts to put in place framework’s such as a national system on producer licensing, different state viewpoints on issues such as fingerprinting have hampered progress. She added that with the Federal Insurance Office issue coming before Congress in the next session, regulators could use state legislators’ input.
Washington is very bank-centric and there needs to be an insurance presences, said Susan Voss, Iowa insurance commissioner and NAIC –president-elect. She noted how the incredible amount of “heavy lifting” required to retain state authority for indexed annuities and get a favorable outcome with Rule 151A.
The topic then turned to the possible loss of state revenue from premium taxes. Voss said that such a potential loss can rally governors to send letters to their congressional delegations.