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GAO Report: NAIC Response Cautions Against Unjustified Changes

Source: NAIC

Posted on 12 Jan 2009

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National Association of Insurance Commissioners (NAIC) President and New Hampshire Insurance Commissioner Roger Sevigny today issued the following statement in response to the recent Government Accountability Office (GAO) report on financial regulation: 
“We commend the GAO for its review of the U.S. financial regulatory system—and look forward to working with the new Congress and administration to strengthen and improve our state-federal regulatory system with meaningful reforms. We have all witnessed how lax federal regulation and oversight has contributed to the current financial crisis and warn against any plan to create a regulatory authority that is solely federally based. 
“While the GAO report does not take a position on the proposed optional federal charter for insurance regulation, state insurance regulators recognize that such a proposal would only increase the complexity of the current U.S. financial regulatory structure and not address the gaps in regulation or inadequate coordination and communication between functional regulators. 
“State insurance regulators are continuing efforts to make adjustments, as needed, in the ever-changing insurance marketplace. We are pleased to point out that the study acknowledges that state regulators are positioned to ‘move more quickly and more flexibly to respond to activities causing harm to consumers.’ 
“We caution Congress against efforts by some in the industry to use the current financial turmoil as a pretext for proposing changes to the existing state regulatory structure that would essentially result in deregulation. 
“We look forward to working with all stakeholders in developing tools and sharing our regulatory expertise that can be used in a wider regulatory framework to address some of the important systemic concerns raised by the report.”