NAIC makes argument for state over federal regulation

The new chief executive of the National Association of Insurance Commissioners (NAIC) Dr Therese Vaughan has defended the state-based system of regulation in the US. Speaking in an interview for the National Association of Professional Insurance Agents, Dr Vaughan said state insurance regulation protects consumers and that “this is not just a state-based system; this is a national state-based system” that requires a lot of coordination. “We have built a structure over the last 20 years or so that has a tremendous amount of interaction between the states; it’s got a lot of peer review; it’s got a lot of states advising other states; it has standards in areas that we all adhere to,” she said. Ms Vaughan said the current system of regulation allows for states to identify problems that may be overlooked by other states. However, she conceded that the system could be improved. “It’s a good system, but can we make it better. This is an opportunity to look at ways to make the state-based system function more as a highly coordinated national system. I think if we look three to five years from now, we will see some changes in the relationship among the states,” she said.