Posted on 09 Jun 2009
In preparation for the Obama Administration to wade into the murky waters of insurance and financial services regulatory reform, leaders of critical sectors of the insurance industry, including NAIFA President Cliff Wilson, met last Thursday with White House officials to consider options.
NAIFA President Cliff Wilson represented NAIFA June 4 at a White House financial services industry meeting with key Obama Administration officials. While the discussion was open to a broad array of issues confronting the entire financial services industry, the preponderance of the meeting was devoted to considering how the insurance industry might, should or could fit within a comprehensive and integrated financial services regulatory framework. Because insurance is primarily a state regulated industry, there is no central place from which government or legislative officials can draw information and core ideas.
Since financial markets began unraveling last fall, Congress has been pondering how to fix perceived lapses in financial regulation and prevent future financial disasters. The White House meeting signals the intention of the Obama Administration to fashion its own policy preferences that would take their place alongside a myriad of concepts currently under study by the committees with the responsibility over insurance and financial regulatory issues in Congress. Administration officials have marked June 17 as a target date for reaching at least preliminary judgments on key policy questions. Administration officials profess working with a clean slate on the insurance regulatory component.
President Wilson reiterated NAIFA’s interest in working toward a policy that effectively integrates a possible federal “systemic” risk regulator with other, primary regulators such as the current state regulatory structure. How, exactly such an integration might look is a work in progress. NAIFA policy calls for conditional support for a federal program provided agents and advisors have the same options as insurance companies in choosing to be state or federally regulated, there are strong consumer protections such as solvency standards left in place, and the program preserves the state regulatory system for those who chose to be regulated at the state level.
Presuming the Administration meets its June 17 target date, the Obama proposals will likely be warmly received by Congressional leaders. Congressional committees of jurisdiction have held numerous fact finding and “think tank” type hearings in preparation for actually legislating a comprehensive proposal. Although the exact timetable for Congress to act is somewhat unclear, there is almost no doubt that Congress will act before this year is over. And, at this juncture, it is highly likely that regulation of insurance in some form will be included.