hoteles en InnsbruckS.C. Insurance Regulator Wonders Why Many States Shun Market-Driven Approach

CHARLESTON, S.C. April 21 (BestWire) - South Carolina Insurance Commissioner Ernst Csiszar said allowing the market to regulate prices in his state has worked, and he's puzzled why more states don't do it.

Csiszar's state has kicked off an industry effort to educate legislators about the virtues of state regulation. Called the Alliance for Sound State Uniform Regulatory Efficiency, the campaign has the blessing of the National Association of Insurance Commissioners but isn't organized by the NAIC, Csiszar said.

The idea is to let the industry organize the campaign to fight off efforts at federal regulation and "let the political world know there are those in full support of maintaining a state-based regulatory system," he said. "I understand they're getting ready to launch in 16 other states."

alberghi b&b SinaiaIn South Carolina, state regulation means a market-driven, market-based regulatory system, which has worked to turn the state's auto and commercial insurance markets around since reforms were enacted in 1997, Csiszar said.

"It puzzles me why it's not widespread," Csiszar said. "It works. We don't get consumer complaints these days about auto rates."

He has said he is looking at a similar approach to head off homeowners capacity problems in the state and is looking at Illinois' regulatory model. "We're one of the few states that has taken this approach. I'm surprised such a large contingent of states still subscribe to the old-fashioned regulatory approach."

Malaga hotelsThe ultimate goal of the NAIC and the ASSURE campaign is to improve state regulation while preserving it. Congress is looking at the same thing, said Csiszar, who spoke recently before a House subcommittee looking at state regulation's effects on availability and affordability.

five star hotel in FlorenceThe House Financial Services Committee has held several hearings looking at insurance regulation and obstacles to efficient markets.

"I think you have much more openness to a market-driven regulatory system at the federal level than at the state level," Csiszar said.

His testimony centered on how the regulatory changes in South Carolina improved that market. He said his "sense" of the tone of the hearing was that sentiment on the subcommittee ran between two extremes--an optional federal charter, or doing nothing.

"What I heard seemed to indicate the House is probably leaning toward--maybe not an optional federal charter--but a system where you have federal mandates," Csiszar said.

For example, to solve speed-to-market problems, Congress could say to the states that unless reforms are made by a certain date, Congress will take action.

"That came through fairly loud and clear," Csiszar said.

(By Dennis Kelly, Washington bureau manager, BestWeek: Dennis.Kelly@ambest.com) BN-NJ-04-21-2003 1607 ET #