May 11, 2009 -- The National Association of Professional Insurance Agents (PIA) is largely encouraged by the substance, tenor and tone of the Government Accountability Office’s (GAO) report on Insurance Reciprocity and Uniformity, which was released on April 6, 2009.

The GAO report presents an accurate assessment of ongoing efforts to achieve greater modernization of our country’s national system of state-based insurance regulation. It is positive, in that it recognizes the key role played by the state regulatory system and makes recommendations for continued improvements to the state system.

We are encouraged that this most recent GAO report recognizes the importance of state law and the duties of state insurance officials. Significantly, the GAO report predominately points to state, rather than federal, solutions and was compiled with input from the National Association of Insurance Commissioners (NAIC). The report accurately notes that “regulators, insurers, and consumers may not benefit if achieving uniformity occurred by simply lowering standards across states,” and that uniformity and reciprocity for the approval of property/casualty products might not be possible, “as it would require significant changes in state laws, including a wide body of tort law.”

While the GAO report repeats its previous observation that Congress “could consider the advantages and disadvantages of a federal charter,” it goes on to note that “such an approach could also have unintended consequences for state regulatory bodies and for insurance firms as well.” 

As an association that supports state regulation of insurance and opposes federalization, PIA is encouraged by what we see as a more nuanced and balanced analysis by GAO that makes recommendations for improvements to the state system, rather than advocates for federalization.
 
Summary of GAO Report  
Full GAO Report  
GAO Recommendations

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street America (SM). PIA’s web address is www.pianet.com.