As predicted the debate on needed changes to the insurance regulatory model is now officially raging. On one side is our State Insurance Regulators crying foul on Federal oversight of insurers while on the other are those that point out the obvious: The old way of doing things just won’t do any longer. I’ll note the same group that is now pretending to look out for us consumers is also the ones with a revolving door problem. As a group and with little exception state insurance commissioners like our own Mike Chaney here in Mississippi are paper tigers who pretty much do just what the insurance industry tells them or they’ll leave.
Would the hodgepodge of state regulations have prevented subprime disaster? No, but it also didn’t prevent AIG from imploding either. Jim Connolly at the National Underwriter has the story of secrecy, which is generally how our state insurance regulators prefer to conduct their business. Putting this group of fossils out of business will be a good impact of the AIG disaster IMHO:
State insurance regulators have voted to keep confidential insurers’ pending applications for new products prior to their approval.
The action at a meeting of the National Association of Insurance Commissioners applies to product filings that are pending approval with the Interstate Insurance Product Regulation Commission.
Prior to the vote insurers warned that amending the current public access policy would make them less likely to use the commission. But a leading consumer advocate called that argument “a sham.” The Compact Commission is currently trying to increase the number of product filings so the commission will become profitable and self-sustaining. Continue reading “The House is Burning Down and Methuselah is Bitching a Blue Streak”