A property-casualty trade association has called the National Association of Insurance Commissioners president's praise for a proposed new solvency rule for the European insurance market as fuel for the optional federal charter bill now in Congress.
David Snyder, assistant vice president for the American Insurance Association, said European companies are realizing the value of a single insurance market for their continent, as does NAIC president Al Iuppa, apparently.
In a speech to the European Commission last week, the Maine insurance commissioner praised the Solvency II standard-setting effort, calling it when completed, “the crowned jewel of the European single market for insurance.”
“Well why wouldn't such a market be good for the U.S.,” Mr. Snyder asked.
While Mr. Snyder agrees that a national solvency regime as called for in Solvency II for the most part exists in this country, he believes that Mr. Iuppa's praise for the system as “the foundation of your (European) regulatory system” indicates he sees the value of a standardized system across the ocean that he does not see here.
Federal lawmakers are currently considering legislation to create an optional federal charter for large carriers doing business in many states. Both the AIA and the American Council of Life Insurers have backed the move while other trade associations have opposed it in varying degrees.
The NAIC has been one of the most vocal opponents of the optional federal charter and has been lukewarm to the idea of mandating federal standards for state regulators as a compromise.
“The Europeans are currently far ahead of the U.S. in establishing the kind of standardized regulatory system as called for in the optional federal charter,” Mr. Snyder said.
He also noted that any strong regulatory standardization moves in Europe threaten to erode the competitiveness of the U.S. insurance industry if similar moves are not forthcoming here.
Mr. Iuppa did not respond to a request for comment for this story.
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