Why US insurance agents support state regulations

The Independent Insurance Agents and Brokers of America is asking the new President to keep the state-based regulatory structure intact, arguing that it is the best way to protect consumers. Jonathan Steiman, financial services technology analyst at independent market analysis firm Datamonitor, believes this argument to be tenuous. According to Mr Steiman, it serves agents and brokers rather than insurers and consumers, and that therefore the new Democratic administration should treat the proposal with a healthy level of scepticism. Mr Steiman is the author of a Datamonitor report on customer relationship management (CRM) in the global insurance market, specifically looking at how the strategy and accompanying technology can be used to defend against a product that is quickly becoming a commodity. Mr Steiman also wrote Trends and Strategies in Policy Administration BPO in the second quarter of 2008

Jonathan Steiman

President Barack Obama’s new mailbox at 1600 Pennsylvania Avenue is overflowing with letters from special interest groups and among them is a proposal from the Independent Insurance Agents and Brokers of America (IIABA). The President should read this letter with a healthy level of scepticism. The organization’s recommendation to keep the state-based regulatory structure intact is not wholly in the interest of the consumer, as the letter claims. Indeed, the current regulatory regime favours agents and brokers, at the expense of the consumer, by making it difficult for insurers to sell direct.