January 9, 2009
Yesterday, NAMIC sent a new analysis to all members of Congress and state insurance departments that examines the property/casualty insurance industry’s role – or lack thereof – in the current financial crisis. The analysis was written by former Illinois Director of Insurance Nat Shapo.
The report, “Financial Oversight Failure Highlights Effectiveness of Insurance Regulation,” explains that property/casualty insurance products are fundamentally different from the exotic financial instruments that played a major role in the current economic meltdown. It also highlights the fact that the property/casualty insurance industry has remained comparatively strong and that the state-based system of solvency regulation has proven effective. The paper concludes that while there is action the government can and should take to resolve our financial situation, we must not disrupt the financial markets and regulatory systems that have served consumers well, i.e., the property/casualty insurance industry.
It is essential that we remind Congress and insurance regulators that the long-standing record of prudent management and rational decision making has resulted in the property/casualty insurance industry’s ability to continue to fulfill its promises and provide necessary protection to policyholders in these difficult times. This new report will be a critical tool in our continuing campaign to differentiate our industry from those in need of further regulation and government assistance.
We must ensure that any adopted legislation addresses only the problem areas in the financial markets – such as credit default swaps – and does not impose unnecessary regulations on our industry that result in unintended consequences that could harm you, your business, and your policyholders.
We will be using this report to generate high-level meetings with key lawmakers in the coming weeks. Please watch for our upcoming action alert next week as we continue to educate lawmakers on the need to remain focused on the causes of the crisis – not our industry.
Posted: Friday, January 09, 2009 12:00:00 AM. Modified: Friday, January 09, 2009 3:18:28 PM.
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