9:45 am - 10:30 am
Banks and Insurance: Moving Closer to Affiliation
Moderator: Christopher Winans, Executive Editor, A.M. Best



Regulation Remains Stumbling Block on Financial Services, Experts Say

"That's a sea change from what we used to have" in Washington, he added. "The overall goal of consolidation is one both industries now agree upon."

At a separate panel on state-vs.-federal regulation, former Pennsylvania insurance commissioner Linda Kaiser said some insurance regulation should be centralized. She explained that companies are burdened by execessive and unnecessary rules under the current state-by-state regulatory structure.

"I have found that there are more pieces of paper that require my signature today than when I was a commissioner," said Kaiser, senior vice president and general counsel of Reliance Insurance Co.

She also said that the National Association of Insurance Commissioners hasn't made the most of its accreditation program. "Accreditation has not come anywhere near to realizing its full potential," she said.

Joel Wood, vice president of government affairs for the Council of Insurance Agents and Brokers, argued at the same panel that there is "a reality gap" between the insurance industry's rhetoric in support of state regulation and the fact that many insurers and brokers support a a greater federal role in insurance regulation.

"The NAIC has a golden opportunity to make progress" on modernizing state insurance regulation, Wood concluded.

But if state regulators fail to act, they will cede more authority to federal agencies, he predicted. He said Republican members of Congress, some of the most ardent defenders of states' rights, could end up supporting federal insurance regulation.

"If you can make the argument that there are business efficiencies with federal regulation," Wood said, "these Republicans will cast the rhetoric of states rights aside" and push for more centralized oversight of insurance.