Regulators And Reform: NAIC Shares Recommendations With Congress

Health, Financial Reform Dominate Washington Forum Agenda

WASHINGTON, D.C. (May 19, 2010) — Members of the National Association of Insurance Commissioners (NAIC) are in the nation’s capital this week to confer with members of Congress about ongoing financial and health reform efforts.

More than 35 state insurance regulators are gathered for the NAIC Washington Forum where they received a Congressional update from Rep. Earl Pomeroy (D-ND), who offered his perspective as a former NAIC President and North Dakota Insurance Commissioner. Regulators also heard from Michael S. Barr, Assistant Secretary for Financial Institutions at the U.S. Department of Treasury, Meg Lundsager, U.S. Executive Director of the International Monetary Fund, and senior officials from the Department of Health and Human Services (HHS).

NAIC members are also meeting with their respective senators to discuss S. 3217, the Restoring American Financial Stability Act. They will urge the lawmakers to not undermine the strong state insurance regulatory system and emphasize how state regulators helped protect policyholders from the worst of the financial turmoil last year.

Regulators are specifically urging senators to support a bipartisan amendment sponsored by Sen. Jeff Merkley (D-OR) that would make the proposed Office of National Insurance (ONI) more consistent with narrow language in the reform package passed by the U.S. House of Representatives. The amendment ensures that the ONI would have limited preemptive power and would be required to consult with state regulators and Congress before negotiating international agreements. Additionally, commissioners are advocating for the inclusion of an amendment to add state financial regulators to the Financial Stability Oversight Council (FSOC) and voicing support for the legislation’s general approach of leaving insurance regulatory authority with the states. 

“As experts in matters of financial stability and systemic risk, state regulators have a wide breadth of experience and insight to offer,” said Jane L. Cline, NAIC President and West Virginia Insurance Commissioner. “Our support of these amendments reflects our commitment to protecting consumers by strengthening proven principles to improve the financial services regulatory structure.”

Health care reform is also a critical topic of discussion at the forum. The NAIC submitted responses last week to HHS, which provide answers to questions published in the Federal Register on April 14, 2010 about medical loss ratios and rate review. The NAIC is currently working on recommendations to HHS for the definitions and calculations that make up the final medical loss ratio formula when that provision takes effect in 2011.

“Successful implementation of the new health care law will require continued collaboration between state and federal regulators,” said Cline. “We will continue to work closely with Congress during this process and offer our perspectives to ensure an effective execution of this comprehensive reform.”