In his first letter to PIA members, PIA National President Kenneth R. Auerbach, Esq. reaffirmed PIA’s position in support of state regulation of insurance and in opposition to federalization.

“We are now witnessing the consequences of the failure by federal authorities to prudently regulate many of the activities of banks and securities firms,” said Auerbach. “These failures have been breathtaking in scope and disastrous for our nation’s economy. But despite the financial difficulties our nation faces, now is an especially good time to be an independent insurance agent.” Auerbach said that Main Street insurance agents should remain mindful of their position relative to the other sectors of financial services.

“Our industry’s fiscal house is in good order in terms of their insurance operations. The same cannot be said about banking and securities,” Auerbach said. “Because insurance is prudently regulated by the states, our sector has remained stable while the questionable activities permitted by federal regulators in the banking and securities sectors led to this financial meltdown. The effective and efficient supervision of our industry by the state insurance regulatory system ensures the financial stability and soundness that protects insureds, carriers and agents alike.”

“The advocates of federal regulation of insurance are perversely pointing to the one financial services sector that has largely been insulated from the worst of the financial carnage – insurance – and saying that the market meltdown proves that insurance should be federally regulated. That’s a little like a drunk who caused a bad traffic accident saying that the other drivers who remained sober need to start drinking and driving,” he said.

“In fact, this economic crisis proves that insurance should not be brought into the federal system that has failed so miserably in its supervision of banking and securities. As our friends at the National Conference of Insurance Legislators (NCOIL) aptly suggest, the state insurance regulatory system should serve as a  model for reforms to the federal regulatory system for banks and securities – not vice-versa.” Read Ken Auerbach’s full President’s Letter.

November 4, 2008