SMART Sparks Tough Talk, Not Action
The war of words between state regulators and Washington lawmakers over whether to establish federal standards for insurer oversight heated up this year–nearly reaching a boiling point–but there was far more talk than action by both sides.
Still, the specter of intervention by Uncle Sam hung like the sword of Damocles over the heads of state regulators, especially after New York Attorney General Eliot Spitzer showed up local insurance commissioners by policing the industry they were elected or appointed to oversee. Mr. Spitzer also called for an end to McCarran-Ferguson protections.
Rep. Michael Oxley, R-Ohio–chair of the House Financial Services Committee and champion of the State Modernization and Regulatory Transparency Act, known as SMART–warned last month that unless states cut red tape and create a more uniform oversight system, momentum for a federal takeover will gain strength.
Two weeks later, Ernst Csiszar, president of the Property Casualty Insurers Association of America, also warned that "the day of reckoning is coming" for state regulators. Mr. Csiszar–who made NU's top 10 list last year after quitting his post as president of the National Association of Insurance Commissioners to take over PCI–said the "intrusiveness" of the current state regulatory system "is almost beyond my comprehension."
Rep. Oxley has announced he will retire when his term ends in January 2007. He could push to pass SMART next year to cap his congressional career, or substitute an optional federal charter bill that would be even more distasteful to state regulators.
However, insurance commissioners won't surrender their turf without a bitter fight. Washington was given a clear demonstration of the NAIC's resolve on this issue back in March when the group dropped a SMART bomb on Congress with a letter making it clear regulators would not support the federal standards concept.
Stay tuned!
"Despite what you may have heard about SMART, it is not the end of state-based insurance regulation. Those are scare tactics coming from people who have, I think, something to lose."
Rep. Michael Oxley, R-Ohio
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
