Hotels pas chers Marbella States Line up Against Federal Regulation of US Insurance

By Richard Banks, Hamilton.

27 August 2003

Insurance Day

Copyright 2003 Informa UK Ltd. All rights reserved.

FEDERAL regulation of insurance in the US would cost state budgets and consumers dearly, according to Louisiana insurance commissioner Robert Wooley.

Mr Wooley's comments came as he revealed that Louisiana had become the latest state to join the Alliance for Sound State Uniform Regulatory Efficiency (Assure), a non-profit group of consumers, legislators, regulators, industry and business leaders, dedicated to keeping insurance regulated at state level.

Assure's stated aim is: "To improve and defend state insurance regulation by supporting greater efficiency and uniformity in regulatory practices while proactively and aggressively maintaining vital consumer protections and education initiatives, as well as promoting streamlined national standards that recognise a unique and evolving state-based marketplace."

cheap hotels in UppsalaAmong the most prominent moves towards federal regulation is South Carolina's Democrat senator Ernest "Fritz" Hollings's draft bill unveiled last month which would give the US Department of Commerce the authority to regulate the entire insurance industry.

If passed, Mr Hollings's Insurance Consumer Protection Act of 2003 would repeal the McCarran-Ferguson anti-trust exemption and create an independent Federal Insurance Commission within the Department of Commerce. The commission would be made up of five commissioners serving seven-year terms, regulating property and casualty lines as well as life insurance. Workers' compensation and state residual workers' compensation pools will be excluded.

Among the commission's responsibilities would be:

* Licensing and standards for the insurance industry

* Regulation of rates and policies

* Annual examinations and solvency review

* Investigation of market conduct

* Establishment of accounting standards

Louisiana's Robert Wooley, like many of his state regulator colleagues, is vehemently opposed to any such moves. Announcing the creation of a state chapter of Assure in Louisiana, he claimed federal regulation would not work with insurance because the state regulators' main job is to protect consumers.

He said: "If regulation is pulled from states, I don't think the federal government will be able to set up a federal bureaucracy that will be able to do that."

Furthermore, he suggested that changes along the lines of those proposed by Mr Hollings could cost states in terms of lost revenue.

Mr Wooley said: "Takeover of insurance regulation by the feds would cost Louisiana more than $200m annually in lost premium taxes, rob consumers of their right to local protection and bog efficient state government claims and regulatory processes in the mire of federal bureaucracy."

Arkansas insurance commissioner, Mike Pickens, the current president of the National Association of Insurance Commissioners, joined Mr Wooley for his announcement.

Arkansas is one of three states to have extensive Assure coalitions. North Carolina and South Carolina are the others and several other states are working to create similar groups.

Meanwhile, as the race for Louisiana's political offices began, the US senator John Breaux endorsed Mr Wooley to continue as insurance commissioner through election in the October 4 balloting. Louisiana's 2003 primary election will be held on October 4, and the statewide general election will be on November 15.

Athens hotelsMr Wooley has been in his post more than two years, moving up from the position of first assistant insurance commissioner upon the conviction of former commissioner Jim Brown for perjury. He faces competition from six other candidates who have completed the filing hurdle and were officially "qualified" to run.