NU Online News Service, Oct. 19, 1:36 p.m. EDT

ORLANDO, Fla.–Florida's insurance commissioner said the insurance industry has gone through a radical period of change in the past year and has come out showing the state-based system of regulation can withstand the worst of economic turmoil.

"Regardless of your party affiliation, we all must admit that this year, 2010, has been a transformational year for insurance companies and insurance regulators," said Kevin McCarty, commissioner of the Florida Office of Insurance Regulation.

Just two years ago, the industry was grappling with the worst economic crisis the country had seen in generations.

"We readily admitted that our system was under siege, and many in Washington were headstrong about federalizing our system," Commissioner McCarty said. "One thing we have learned from this crisis–our system is effective and has worked through this financial crisis much better than the other financial sectors. And we as regulators should be proud of the work we have done to improve our regulatory framework."

His remarks came during the opening session of the National Association of Insurance Commissioner's 202^nd conference held here yesterday.

Speaking as the home state host, Commissioner McCarty noted that regulators are facing the challenges of implementing the health care reform act, and he said despite reservations, the NAIC has managed to meet its obligations.

He also noted the work of the NAIC, and particularly Louisiana Department of Insurance Commissioner James J. Donelon, in creating the foundations for implementing the surplus lines act aimed at streamlining the payment of taxes by wholesale insurers.

Recognizing her role as president of the NAIC is coming to an end, West Virginia Insurance Commissioner Jane Cline said much work remains to be done between now and the end of the year, and the future.

The importance of the NAIC was recently recognized when President Barack Obama became the first sitting president to meet with members of the association, but that does not "mean our engagement with Washington is over," she noted.

With the enactment of financial reform legislation in the Dodd-Frank Bill and the rules that are still to be created under the act, state regulators are still adjusting to the changing landscape, she said. The creation of the Federal Insurance Office and the naming of John Huff, director of the Missouri Department of Insurance, to the Federal Financial Stability Oversight Council, heightens the profile of the NAIC and places it as one of a group of experts to identify systemic risk in the future, she observed.

The NAIC also recognized several of its members over the past year with awards.

Recognized for their work were:

o Steve Ostlund, life and health actuary with the Alabama Insurance Department, and Lou Felice, assistant deputy superintendent and bureau chief for the New York State Insurance Department, with the Robert Dineen Award. They were recognized for their leadership in chairing the two working groups tasked with developing standards for medical loss ratios (MLR) under the Patient Protection and Affordable Care Act.

o Virginia Insurance Commissioner Alfred W. Gross received the President's Award for Distinguished NAIC Member Leadership.

o The Florida Office of Insurance Regulation received the Esprit de Corps Award.