NAIC Pushed For Reforms By Congressmen

By Michael Ha

NU Online News Service, June 26, 3:50 p.m. EDT, NewYork?Two influential congressmen suggested to stateinsurance regulators that if they fail to speed up efforts to cuttheir procedural red tape the result could be more federaloversight of their industry.

U.S. Sen. Ben Nelson, D-Nebraska, addressing members of theNational Association of Insurance Commissioners at their summermeeting in New York that concluded earlier this week, urged them toadopt "more urgent regulatory modernization and reform plans."

Appearing before a commissioners' roundtable session, Sen.Nelsonwarned state regulators about a potential federal oversight that isbeing lobbied by various industry groups.

If regulators don't engage in a "more urgent, energetic plan formodernization and reform," they will end up playing catch-up withthose lobbying for federal oversight, he said.

Mr. Nelson is familiar with the procedural details of stateinsurance regulations and the NAIC, having served as Nebraskainsurance director as well as chief of staff and executive vicepresident of the NAIC prior to serving as his state's governor andbeing elected a senator in 2000.

"You know the shortcomings of the current regulatory system andwhat it would take to fix them. I'd suggest that you draft your ownset of standards and set a timetable for true implementation.Otherwise, you will be faced with reacting to the Congressionalprocess," Sen. Nelson warned.

He added, however, that "most members of Congress" may not seethe need to undertake this debate if state regulators become moreforceful advocates for reform.

"How you proceed in your individual states will help dictate howwe in Congress move forward. I'd suggest you try to engage some ofyour governors in this debate and others in Congress who come froma true states-rights perspective," Sen. Nelson advised.

Speaking separately at a commissioners' discussion, Rep. MichaelOxley, R-Ohio, chairman of the House Committee on FinancialServices, also offered his perspective on this debate to the NAICmembers.

Like Sen. Nelson, Rep. Oxley emphasized the need for reformefforts toward uniformity in the regulatory environment. But at thesame time, he said he would rather work within the existing stateregulatory system for achieving improvements.

"We hope that, in working with all the interested parties, wewill have the opportunity to enact meaningful short-term changesthat will benefit consumers across the country," Rep. Oxley toldstate regulators.

"In the meantime, we will continue to explore other avenues forreform while working with the states to improve the system fromwithin," he said.

Both Sen. Nelson and Rep. Oxley participated in the NAIC summermeeting after accepting an invitation from NAIC officers.

Commenting on legislators' messages to the NAIC members, MikePickens, Arkansas insurance commissioner and president of the NAIC,said, "We all agree that regulations can become more efficient,more effective and thus more beneficial to consumers."

Commissioner Pickens also said it was good to hear Rep. Oxleychoose states as the "preferable agents for change" over "anundefined and untested federal mechanism."