State vs Federal Regulation

Now, consumers don’t care who regulates insurance.

  • We really don’t care if it is Federal or State.
  • But we do care if it is any good, and it isn’t good today.

2007 1030 - GOV (House) - Additional Perspectives on the Need for Insurance Regulatory Reform - [PDF-180p,

  • There are many company people as well as regulators who will privately tell you that federal regulation is coming in five years or 10 years.

--  Robert J. Callahan

1990 - SOA - Surplus Management, Society of Actuaries - 28p

  • If we want to address the problems in the insurance industry, I strongly urge that a federally chartered insurance corporation be set up, along the same lines of the FDIC , to monitor this industry. 
  • Indeed , if you think that the property/casualty crisis is difficult, I can assure you that the same crisis will come home, in spades, with the life insurance industry in approximately three to five years and it is not too late to address that crisis . (p761)

--  1986 0225 - Letter - Michael A. Hatch, State of Minnesota, Department of Commerce

1985 1986 – GOV (Senate) - The Cost and Availability of Liability Insurance for Small Business - [PDF-1163p-GooglePlay-link]

  • 2005 0211 - CRS - Insurance Regulation: History, Background, and Recent Congressional Oversight (RL31982) - 32p
    • (p2-Summary) - This report provides the historical background for examining the arguments in this debate. It shows that state regulation of insurance is largely a historical artifact,...

While insurance should remain state regulated, there is certainly a role for the Federal Government to play in concert with the State insurance departments and the NAIC.

  • The NAIC proposed this statute because the Federal Government has unequaled clout, reach, and investigatory and law enforcement resources.
  • The State insurance departments are ready and willing to investigate and prosecute insurance fraud, often in cooperation with Federal law enforcement agencies.

--  Earl Pomeroy (North Dakota / NAIC)

1994 0421 - GOV - Insurance Fraud - Congressional Record (Volume 140, Number 45) - [link]

  • 1991 - AP - Going National: The Life Insurance Industry's Campaign for Federal Regulation after the Civil War, Philip L. Merkel, The Business History Review Vol. 65, No. 3, Financial Services (Autumn, 1991), pp. 528-553 (28 pages), Published By: The President and Fellows of Harvard College - [link]

3. H.R. 1290

Bob Mackin (NCOIL) expressed concerns about the various industry and related groups that have publicly supported H.R. 1290.

  • Assemblyman Lasher said that NCOIL and NAIC should present a coordinated effort to oppose the legislation for the best interest of insurance consumers.
  • Director McCartney noted that consumer groups generally agree that H.R. 1290 does not offer any consumer protection.
  • The members agreed to continue to coordinate their efforts to defeat the federal legislation that would preempt state regulation of insurance.

1993-2, NAIC Proceedings

H.R.1290 - Federal Insurance Solvency Act of 1993103rd Congress (1993-1994) - - [link]

On state vs. federal regulation in the U.S., I have no position.

  • I am an insurance professor, not a political scientist.
  • State regulation has serious shortcomings, but I do not know if federal regulation would be any better.

--  Joseph Belth

1981 - SOA - The Life Insurance Business--The View of Consumerists, Society of Actuaries (rsa81v7n38) - Daniel F. Case - Moderator - 18p