House Introduces “National Insurance Act”
Bill highlights need for thoughtful regulatory reform
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Lee Allen
Vice President of Communications and Marketing
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September 28, 2006 –The National Association of Insurance and Financial Advisors (NAIFA) welcomed action taken by Rep. Ed Royce (R-Calif.) today to bring greater attention to the need for reforms in the insurance regulatory system.
Congressman Royce introduced the National Insurance Act of 2006, which would allow life and property/casualty insurers and their agents to choose to be regulated by the federal government or remain in the state system—a concept known as “optional federal charter”. The bill, H.R. 6225, is the companion to the Senate’s own National Insurance Act of 2006, introduced by Sens. John Sununu (R-N.H.) and Tim Johnson (D-S.D.) in April.
“The regulation of insurance is an important matter to consumers as well as producers, and deserves the attention it has received by Congress,” said David F. Woods, CLU, ChFC, LUTCF, NAIFA’s chief executive officer. “In many respects the current system is in need of improvement. For years NAIFA has worked closely with states and the National Association of Insurance Commissioners [NAIC] to modernize state laws so consumers can gain access to the latest products in the marketplace, and agents can best serve their clients.”
NAIFA continues to work with state commissioners on the NAIC’s major initiative to improve speed-to-market conditions for life insurance, annuity, disability income and long-term care products. Called the Interstate Compact Commission, the new system establishes a single point-of-contact for product review. Until the creation of the commission, each state had to approve a product before it could be sold in that state. Adoption of the compact was required by 26 states before the commission could become operational—a milestone reached in May of this year.
The Interstate Compact Commission has since appointed NAIFA as the agent representative to the Interstate Compact Commission’s Interim Industry Advisory Committee.
NAIFA has also joined the American Council of Life Insurers in a state-based initiative to address the life insurance needs of underserved communities. The groups are working together to remove burdensome agent licensing requirements that would discourage potential qualified recruits from pursuing a career as a life insurance agent.
“NAIFA is committed to improving the state-based regulatory system and remains open to good-faith reform initiatives, state or federal, that will help agents better serve the public,” said John Davidson, LUTCF, FSS, NAIFA’s newly elected president, an insurance agent based in Thousand Oaks, Calif.
To that end, Davidson added: “NAIFA looks forward to working with Rep. Royce and his colleagues in the House and Senate to ensure that any regulatory reform proposal that moves forward is in the best interests of consumers and the NAIFA members who serve them.”
About NAIFA: Founded in 1890 as the National Association of Life Underwriters, the National Association of Insurance and Financial Advisors comprises 800 state and local associations representing the business interests of 225,000 members and their employees nationwide. Members focus their practices on one or more of the following: life insurance and annuities, health insurance and employee benefits, multiline, and financial advising and investments. NAIFA's mission is to advocate for a positive legislative and regulatory environment, enhance business and professional skills, and promote the ethical conduct of its members. NAIFA's website can be accessed at www.naifa.org.