Tuesday
Jul292008
Insurance regulation: U.S. needs to get with the program
Tuesday, July 29, 2008 at 6:27PM
The main problem with insurance regulation is many states are not following federal regulations, which creates hurdles for consumers and prevents regulators from forming a cohesive, national system, said the American Council of Life Insurers (ACLI). A panel of witnesses testified before the Senate Committee on Banking, Housing, and Urban Affairs about a proposed optional federal charter (OFC) that would improve the situation.
Unified national insurance regulation and oversight are disrupted by the unwillingness of states to adapt federal policies, said John Pearson, CEO of Baltimore Life Insurance Company, who spoke on behalf of ACLI. For instance, the National Association of Insurance Commissioners supported a 1998 law that would require insurance companies to deliver buyer's guides to consumers, but only 16 states have adopted this rule in the last ten years, Pearson said.
The United States needs to update its regulatory structure because companies like Zurich Financial Services Group, the third largest writer of commercial property and casualty insurance in the U.S., are impeded by the current system, said Alessandro Iuppa, Senior Vice President of Government and Industry Affairs for Zurich North America. The problem is when U.S. regulators meet with other countries to set standards, the U.S. representatives are unable to take the standards home and make states adopt them. This is a big problem because the international market requires the U.S. to adapt these standards quickly, Iuppa said.
Chairman Chris Dodd (D-Conn.) said three principles are at stake: Strong consumer protection, regulation structure must be implemented, but also promote competition among companies, and regulation must be efficient. Iuppa said consumers have trouble moving from state to state because they have to apply for new insurance when they move. With the OFC, consumers would be able to choose if they wanted the state or federal system, Iuppa said.
Unified national insurance regulation and oversight are disrupted by the unwillingness of states to adapt federal policies, said John Pearson, CEO of Baltimore Life Insurance Company, who spoke on behalf of ACLI. For instance, the National Association of Insurance Commissioners supported a 1998 law that would require insurance companies to deliver buyer's guides to consumers, but only 16 states have adopted this rule in the last ten years, Pearson said.
The United States needs to update its regulatory structure because companies like Zurich Financial Services Group, the third largest writer of commercial property and casualty insurance in the U.S., are impeded by the current system, said Alessandro Iuppa, Senior Vice President of Government and Industry Affairs for Zurich North America. The problem is when U.S. regulators meet with other countries to set standards, the U.S. representatives are unable to take the standards home and make states adopt them. This is a big problem because the international market requires the U.S. to adapt these standards quickly, Iuppa said.
Chairman Chris Dodd (D-Conn.) said three principles are at stake: Strong consumer protection, regulation structure must be implemented, but also promote competition among companies, and regulation must be efficient. Iuppa said consumers have trouble moving from state to state because they have to apply for new insurance when they move. With the OFC, consumers would be able to choose if they wanted the state or federal system, Iuppa said.
Dodd Pushes For Sanctions Against Iran
Senate Banking, Housing and Urban Affairs Committee Chairman Chris Dodd (D-CT) pushed for a number of wide-ranging sanctions against Iran during a hearing Tuesday.
“I intend to move forward in this Committee, this month, on comprehensive sanctions legislation. I am committed, as I think my colleagues are as well, to ensuring that this Congress equips this President with all of the tools he needs to confront the threats posed by Iran," said Dodd.
He announced that they intend to incorporate the Senate's collaborative efforts into legislation that includes:
"Penalties on companies that support Iran’s import of refined petroleum products... the authorization for state and local governments to divest from companies involved in critical business with Iran."
Dodd added, "Our legislation will further tighten our trade embargo on Iran and enhance Treasury’s mandate to freeze assets tied to Iran’s terrorist and proliferation activities and help cut off Iran’s access to the most sensitive and advanced technology available, through tougher export controls on these products sent to Iran through its blackmarket trading partners.”
Dodd hopes that this new legislation will reinforce ongoing diplomatic efforts with Iran.