NAMIC makes the case for state regulation

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Hoping to head off a federal rush into insurance regulation, NAMIC this week released a new report called “Financial Oversight Failures Highlight Effectiveness of Insurance Regulation” (full report here) which makes the case that the state-by-state regulatory regime is more robust than a single federal regulator would be.

As Yogi Berra said, making predictions is hard, especially about the future. On the likelihood of the Optional Federal Charter actually being enacted in the near future, Novarica is of two minds. I continue to believe that the political opposition of NAMIC, IIABA, PCI, and the majority democratic state governments will keep congress from acting, especially when there are so many other fires to put out.  However, Chad Hersh believes that AIG’s collapse means that:

“Other insurance companies will be swept into some new regulation through no fault of their own. Carriers will need to demonstrate that they are willing to subject themselves to additional scrutiny, possibly in the form of federal regulation.”

Novarica will continue to monitor the political situation for additional developments that may tip our predictions towards one side or the other.

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