Federal Insurance Office asked to review NAIC
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WASHINGTON—A longtime congressional critic of the National Assn. of Insurance Commissioners has asked the director of the Federal Insurance Office to review the group's operations.
“It is my hope that your pending FIO report on insurance modernization will kick off a comprehensive discussion of the future of insurance regulation in the U.S.,” wrote Rep. Edward Royce, R-Calif., in a letter sent Thursday to FIO Director Michael McRaith. “However, I do not believe that debate can take place without a thorough review of the NAIC and its operations.”
“Despite not having general congressionally authorized regulatory power, (the NAIC's) recent actions would suggest it and its members believe it does, in fact, have said authority,” said Rep. Royce in a statement accompanying release of the letter. “And despite claims that most policy discussions are held in a public forum, meeting records suggest otherwise. These practices are problematic from a legal perspective as well as a good governance perspective. If they were a federal regulatory agency, there would be checks on their budget and their operations. Unfortunately, very few checks exist today on the NAIC.”
Among other things, Rep. Royce asks Mr. McRaith to examine whether the NAIC is engaging in regulatory activity and whether certain activities it undertakes are consistent with the McCarran-Ferguson Act and whether reforms need to be made to improve the transparency and oversight of the NAIC's budget and open meeting policy.
The McCarran-Ferguson Act gives individual states—rather than the federal government or private organizations—the power to regulate insurance.
Rep. Royce, who serves on the House Financial Services Committee, has long criticized the state-based system of insurance regulation as antiquated. In previous congresses he has introduced legislation that would allow federal rather than state regulation of insurers.
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