State vs. Federal, Round Three

To add to the depth of its assessments, the ACLI said a new CEO task force is now analyzing the industry's policy position on regulatory reform, and reviewing the survey results and factoring in the implications of global regulatory issues as well as those resulting from the passage of the Dodd-Frank financial regulatory reform, it told the FIO.

However, the trade group said it was not in a position to offer specific federal legislative suggestions for implementing improvements to the insurance regulatory system to the FIO at this time. It stood by its established policy position on regulatory reform, from 2000, which calls for a two-track approach to the issue, with one track focusing on improvements to the state-based system and the second track calling for the implementation of an optional federal charter. 

Although the state-based regulatory system has served the industry well and "withstood the recent financial crisis admirably," it hasn't kept pace with the changing times marked by with the advent of Solvency II, the emerging role of the IAIS and efforts to address institutional oversight on a multinational basis, Dodd-Frank and its implementation and G-20 and Financial Stability Board (FSB) regulatory reform measures, according to the ACLI. 

In its filing, written by ACLI General Counsel Gary Hughes and addressed to FIO Director Michael McRaith, the ACLI went on to note that "…in many areas of regulation a lack of uniformity from state to state persists both in terms of the laws and regulations themselves and in terms of their interpretation and enforcement. This lack of uniformity is a major impediment to an efficient and cost-effective regulatory system."