Insurance Regulation; Issues, Background, and Legislation in the 11th Congress

摘要

The individual states have been acknowledged as the primary regulators of insurance as far back as 1868. Since the 1945 McCarran-Ferguson Act, this system has operated with the specific blessing of Congress, but has also been subject to periodic scrutiny and suggestions that the time may have come for Congress to take back the regulatory authority that it granted to the states. In the late 1980s and early 1990s, congressional scrutiny was largely driven by the increasing complexities of the insurance business and concern over whether the states were up to the task of ensuring consumer protections, particularly insurer solvency. Prior to the recent financial crisis, congressional interest in insurance regulation focused on the inefficiencies in the state regulatory system. A major catalyst for congressional interest has been the aftermath of the Gramm-Leach-Bliley Act of 1999 (GLBA), which modernized the regulatory structure for banks and securities firms, but left the insurance sector largely untouched. Many larger insurers, and their trade associations, had previously defended state regulation but consider themselves at a competitive disadvantage in the current regulatory structure. They are now largely arguing for an optional federal charter akin to that available to banks. The increased internationalization of insurance has also brought more pressure on the current U.S. regulatory system. Various pieces of insurance regulatory reform legislation have been introduced in the current and past Congresses, including bills implementing an optional federal charter for insurance and narrower more targeted bills. The states, particularly working through the National Association of Insurance Commissioners (NAIC), were not idle in the face of this increased scrutiny. They reacted quickly to the GLBA requirements that related to insurance agent licensing and have since embarked on a wider ranging project to modernize insurance regulation. This has included both regulatory aspects, such as streamlining the process for rate and form filing, and more basic legal aspects, such as the creation of an interstate compact to provide uniformity across states for some life insurance products. Since every state legislature must pass the legal changes suggested by the NAIC, the process typically does not move rapidly.