The future success of insurance supervision rests in the continued system of state regulation, according to National Association of Insurance Commissioners (NAIC) President Alessandro Iuppa. Testifying before the Senate Banking Committee July 11, Iuppa outlined to committee members the need to retain a coordinated, national system of state-based insurance supervision, which would continue to meet the needs of the modern financial marketplace while effectively protecting individual and commercial policyholders.

Iuppa said that any consideration of insurance must begin with an understanding that insurance products are fundamentally different from banking and securities products and, consequently, the state-based system has evolved over the years to address these fundamental differences. Iuppa cautioned the Committee to avoid undercutting state authority in considering any federal legislation that would preempt important consumer protections.

“A bifurcated regulatory regime with redundant and overlapping responsibilities will result in policyholder confusion, market uncertainty, and other unintended consequences that will harm individuals, families and businesses that rely on insurance for financial protection,” Iuppa said. “The Senate Banking Committee and Congress should reject the notion of a federal insurance regime.”

NAIC Addresses Senate Banking Committee on Insurance Regulatory Reform (7/11/06)

July 18, 2006