Posted on 27 Mar 2009
The comments below from Jimi Grande, vice president for federal and political affairs of the National Association of Mutual Insurance Companies (NAMIC), are in response to yesterday's remarks from Treasury Secretary Timothy F. Geithner during a hearing before the House Financial Services Committee.
“We appreciate the hard work by the treasury secretary to address the nation’s financial crisis. However, many questions remain about the administration’s proposal in terms of the regulation of the property/casualty insurance industry.
“We agree with the secretary’s comments that thousands of smaller companies were not part of the problem – but are part of the solution. The thousands of property/casualty insurance companies on main streets throughout America are highly competitive, well capitalized, and continuing to fulfill promises to their policyholders. They are fundamental to the nation’s economy and its ability to recover from the current crisis.
“NAMIC is pleased that a number of members on the committee, as well as the secretary, reiterated their support of the state-based regulatory system for insurance. While Secretary Geithner told the committee that any federal regulatory authority should not supplant the effective state regulation of insurance, he left open the door to discussion of an optional federal charter.
“We are concerned that the secretary and some members of Congress may use the current crisis as an opportunity to establish federal regulatory authority over insurance activities. Property/casualty insurance regulation should remain at the state level since efforts to establish an optional federal charter or federal oversight of property/casualty insurance would lead to inefficient, costly, and confusing dual regulation.
“We urge Congress and the administration to tread carefully as they craft solutions to the current turmoil and target only those elements of the financial services industry where there are regulatory gaps. We look forward to working with policymakers on this important issue.”