Industry Divided Over Creation of Federal Insurance Regulator
There is a split among insurers over a Senate bill (S.40) to create a federal insurance regulator. The bill would authorize the issuance of Federal charters and licenses for carrying on the sale, solicitation, negotiation, and underwriting of insurance or any other insurance operations, provide for a comprehensive system for the Federal regulation and supervision of national insurers and national agencies, and provide for policyholder protections in the event of an insolvency or the impairment of a national insurer. Opponents of the legislation have some heavy ammunition on their side, including two of the industry's largest political war chests.
AFLAC spent more than a $1 million and NAIFA just shy of that amount to support their cause. By contrast, the two main insurance groups pushing the legislation, the American Insurance Association (AIA) and the American Council of Life Insurers (ACLI), contributed $115,000 and $365,000, respectively, to federal candidates. Read more... The American Council of Life Insurers, one of the two main groups pushing the legislation released a report, Wednesday, May 30th, saying the industry could save more than $5.7 billion annually if it were under the jurisdiction of a single federal regulator rather than state oversight.
The study, conducted by Steven Pottier, associate professor of insurance at the University of Georgia, found the $5 trillion life insurance industry would be able to save money by reducing the filing of regulatory reports, streamlining consumer complaints and undergoing fewer exams. "The cost savings would be associated with rather than responding to the regulatory requirements to 51 jurisdictions -- which vary some from one jurisdiction to another -- you are going to be under one primary regulatory," Pottier said. So with the prospect of such big cost savings should this legislation be a no brainer??
