He said that the "often talked about, but the far off threat of federal regulation is so much closer and that state legislators ought to respond to the Dodd-Frank Act as a rally cry for reform."

He said that the "shape and form of the Federal Insurance Office and Office of Financial Research are not clear, but we do know that they will likely try to gain more authority over time and will likely report that state insurance regulation needs federal partners, if not full blown federal regulation."

He said the FIO and OFR "do have fairly limited powers but their mere presence now changes the landscape and the old debate about state vs. federal insurance regulation."

He said that most of the insurance industry—with the exception of the very largest insurers who might be swept into the new systemic risk regulatory regime—is left out of the legislation.

"But the potential expansion into the insurance regulatory work is not far-fetched and so the potential to dramatically alter the landscape of insurance regulation."

Regarding the Financial Stability Oversight Council, he warned that that agency might require insurers to provide more data on standardized forms than those mandated by state regulators.

Susan Voss, president of the National Association of Insurance Commissioners, said state regulators are watching "very closely" the actions of FSOC as it deals with insurance regulation, but acknowledged that under confidentiality rules being enforced by members and staff of the FSOC, "it is a black hole right now."

Ms. Voss also talked about the health care law, stating that it is the duty of state regulators to "move forward" with implementation of the Patient Protection and Affordable Care Act, "regardless of your political views."

At the same time, acknowledging that the law might be reversed by the courts or repealed by Congress, she said some states have added language that if the bill or parts of it are found to be unconstitutional, there will be wind down provisions. 

She said state regulators are "waiting for a lot of information from the federal Department of Health and Human Services" as states proceed with implementation, and that HHS will be looking over the proposed regulations states promulgate to implement the law.