As you probably know, there has been a strong push in Washington for federal regulation of insurance companies. But a number of insurance consumer advocates are wary of the current proposals for federal regulation of insurance currently being passed around in the halls of Congress. They prefer taking their chances with an imperfect state regulatory system over what many fear would likely emerge from Congress under any federal regulatory plan. Birny Birnbaum, executive director for the Center for Economic Justice, said his group is interested in going wherever consumers can get the best regulatory treatment. Most consumer groups believe the federal proposals are anti-consumer. While state-based regulation has its problems. I believe that ordinary citizens will still have better protection with state-based regulation than with any of the federal-regulation proposals that are being dismissed.
There may be a way to design a national regulatory scheme that is better than what consumers get now with the state-based regulation, but I doubt it. Based on the extremely poor regulation in other areas that we have seen from Washington over the years, I much prefer state regulation of insurance matters. But, it appears the debate on this issue will be ongoing. My choice would be to see state legislative bodies give state regulators more power and authority to regulate insurance and then monitor their performance. That would be the best route to take in my opinion.
Source: Insurance Journal
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