2009 1006 - GOV (House) - Capital Markets Regulatory Reform: Strengthening Investor Protection, Enhancing Oversight of Private Pools of Capital, and Creating a National Insurance Office - [PDF-325p,

• Bean (D-IL): We just heard the NAIC say they have a proposal to create further coordination.
  • I guess I would ask Mr. Herchel and Mr. Atkinson, do you believe or should anyone here have any confidence that after 140 years of efforts by the NAIC to create uniform rules and their failure to actually have that happen, that a new proposal was going to change that?
• Mr. Dennis HERCHEL - (Assistant Vice President and Counsel of Massachusetts Mutual Life Insurance Company, on behalf of the American Council of Life Insurers - ACLI).
  • Congresswoman, I have been working in the insurance arena for decades now, and I have been working with the NAIC, and I have a lot of respect for the insurance regulatory community.
    • They are very dedicated and work very hard.
  • But what we found is that there are constraints on how far they can go.
    • The NAIC is a great organization, puts together great proposals and model laws and model regulations.
• Ms. BEAN. To shorten up your answer so I can get to other questions, you don’t have a lot of confidence that anything is going to be any different than it has for 140 years?
• Mr. HERCHEL. I hope we move on, but it is going to be a tough road for them.
• Ms. BEAN. Mr. Atkinson?
• Mr. David ATKINSON - (Executive Vice President, Reinsurance Group of America (RGA), on behalf of the Reinsurance Association of America (RAA)) 
  • I would add, it is hard.
  • As diligent and dedicated as the NAIC and its members are, how do you get unanimous agreement from so many players?
• Ms. BEAN. From 50 different bodies.
• Mr. ATKINSON. But we are encouraged that they are trying hard.
  • In fact, their latest proposal recognizes the need for a Federal role  in international reinsurance matters.
• Ms. BEAN. I would like to ask Mr. Zielezienski as well?
• Mr. Stephen ZIELEZIENSKI - (Senior Vice President & General Counsel, American Insurance Association (AIA)) 
  • We have said this pretty often, it is not the fault of the State regulators, but the fact is you have to navigate 50 different political environments.
  • If the NAIC produced a perfect model law, you still have to go to the State legislatures and get it passed, and our experience has been there is always going to be those inconsistencies, and, again, it is not their fault.
  • That is just the way it is.
• Ms. BEAN. Again, you don’t have confidence that this is going to change that. I appreciate that.
  • I would like to ask Mr. Zielezienski another question, which is essentially that the Treasury proposal included six principles of reform for insurance reform.
    • It included, and I will just summarize: effective systemic risk regulation; strong capital standards that specifically matched capital allocation with liabilities; meaningful and consistent consumer protections for insurance products and practices; increased national uniformity, which we just spoke about; to improve and broaden regulation of insurance companies and their affiliates; and international coordination.
    • Specifically, you have already said that we don’t have confidence that what we are doing today addresses the national uniformity issue.
  • Does it provide meaningful and consistent consumer protection for insurance products and practices nationally?
• Mr.   ZIELEZIENSKI 
  • I think ‘‘meaningful’’ is subject to interpretation.
    • But consistent, I think the answer is no.
  • One of the frustrations for companies is that you have to deal with requirements that may differ and different definitions of consumer protection.