State insurance legislators and regulators as well as consumer representatives reacted angrily to comments made by Treasury Secretary Henry Paulson attacking state insurance regulation. (See story above.)
The problems were on the investment side of AIG and not with the insurance subsidiaries, George Keiser, R-Bismarck, a state legislator in North Dakota and secretary of the National Conference of Insurance Legislators, Troy, N.Y., said. He spoke during the fall meeting of the National Association of Insurance Commissioners.
Birny Birnbaum, a funded consumer representative speaking at the NAIC meeting, said federal regulators are to blame for ineffective regulation. "Secretary Paulson yesterday claimed that AIG was a classic example of the need for a federal solution. To be polite, Paulson's claims are Orwellian in nature," Birnbaum said.
He noted the "aggressive attempts" to pre-empt state insurance regulation and said the political use of AIG is "even more shocking."
Birnbaum called on the NAIC to "quickly issue a resolution opposing the Paulson plan" noting that the Paulson plan is "flawed and does nothing to help consumers."
"The U.S. is the best insurance market worldwide and offers the best protection for consumers worldwide," he continued. The "problems surfacing have been at the federal level of regulation," Keiser said.
