On behalf of the National Association of Insurance Commissioners (NAIC), New York State Insurance Superintendent Eric Dinallo testified before the U.S. House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises on April 16, 2008 about the states’ ongoing efforts to improve insurance supervision.

The state-based regulatory regime has been very effective for more than 150 years,” Dinallo said. “Insurance oversight has been rigorous, resulting in high regulatory compliance and avoiding the level of insolvencies and market meltdowns we have seen in other sectors of the U.S. financial community. Indeed, our national solvency system has ensured that companies have the wherewithal to pay claims while remaining competitive and profitable.”

“The necessary changes and reforms can be made within the current structure or by adding to it,” Dinello said. “Yet there are those who would scrap this successful state system for a dual state/federal one. They couch their complaints against state insurance regulation in euphemisms like “patchwork” and cite unfounded claims that state regulation somehow impedes international competitiveness, and yet fail to offer any solutions that are reasonable and not extreme. Do those calling for extreme reform really know the clear path of where to go, or is a more moderate voice that recognizes the need to change the voice speaking in the nation’s best interests?”

“As the insurance industry has grown, the state regulatory community has adapted,” Dinallo said. “We have responded to this dynamic environment through increased uniformity, interstate collaboration, leveraging of technology and enhanced operational efficiencies.”

“One size does not fit all in insurance regulation,” Dinello said. “Success is quiet, like the CIA. When regulators do it well, it’s quiet. Quiet is a good thing.”

States Tell Congress They Can Handle Insurance Regulation (NAIC 4/16/08)
 
Testimony of Eric Dinello (full text PDF file)

April 22, 2008