IF ANYONE would have guessed a year ago what the major insurance topic of 2005 would be, he or she probably would have assumed that it would be the congressional debate over federal versus state regulation of insurance. New York Attorney General Elliott Spitzer's announcements last October of inves- tigations into alleged fraud, “bid rigging” and other illegal practices in the insurance industry, however, may have trumped the federal/state regulatory discussions. Nonetheless, there is still a good chance Congress will move forward on the insurance regulation issue, and that could have major implications for all segments of the industry.

Changes in the market and a movement toward a global economy have encouraged some people to consider ways to make the insurance industry work more efficiently. One idea is to make the insurance industry more like the banking industry by allowing insurers to choose to be chartered and regulated by either the federal or state government.

NAPSLO has always believed that insurance is best regulated at the state level, however. If changes are to be made, we would prefer to have national standards that would be implemented by the states, rather than federal regulation.

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