Washington, DC - The National Association of Mutual Insurance Companies (NAMIC) recently submitted comments supporting reforms of insurance regulation at the state level. The remarks came in response to a request for comments by the U.S. Treasury Department, as it conducts a review of the regulatory structure associated with financial institutions.
"NAMIC appreciates the opportunity to address this important issue," said Charles M. Chamness, NAMIC's president and CEO. "With the Bush administration's strong record of support for small businesses and states' rights, NAMIC is confident the Treasury Department will agree with our comments that any significant reforms should take place at the state level."
Chamness discussed the need to reform the current system. "From a property and casualty insurance industry perspective, the key regulatory problem continues to be an over reliance on outdated and inefficient price and form regulation," he wrote. "Current inefficiencies in the insurance marketplace are driven by excessive rate and form regulation, which hamper competitive pricing, inhibit product and service innovation, and delay product delivery. Consistency, while desirable and cost effective, will not in and of itself lessen the marketplace inefficiencies resulting from regulatory models that do not uphold competitive economic principles."
At the same time, Chamness said there are situations in which the federal government can assist and support the insurance marketplace, such as through its programs for terrorism risk insurance, the National Flood Insurance Program, privacy and credit standards, and regulatory coordination with the states. Chamness also said NAMIC is not opposed to looking at a federal-tools approach on a case-by-case basis, such as surplus lines reinsurance – an example of an issue in which Congress has a limited role in promoting modernization streamlining.
In considering regulatory reform, Chamness said NAMIC also urges Treasury to acknowledge and preserve proper legal protections, such as appropriate privilege and confidentiality provisions, essential to business operations.