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Commissioner Diane Koken's Remarks for PIA's Federal Legislative Summit

I have been privileged to serve for almost eight years as Pennsylvania's Insurance Commissioner and am currently honored to serve as President of the...
April 4, 2005

NAIC Commissioner Diane KokenBy Diane Koken
National Association of Insurance Commissioners

I have been privileged to serve for almost eight years as Pennsylvania's Insurance Commissioner and am currently honored to serve as President of the National Association of Insurance Commissioners (NAIC).  I have never ventured into the Capitol's corridors or legislative offices without learning something or trying to offer something of value, myself.  That is really - at its most basic - what the forum for government is all about. We come to exchange ideas and represent a point of view.

Interestingly enough, law is almost entirely dependent on ideas and analogies.

I remember in my first year of law school, my contracts professor said something brilliant in its simplicity: He said, "All things are alike in some ways and different in other ways."

That is so true.

Dialogue on our differences, as well as our similarities, is most important considering the myriad of issues facing us today.  In the long run, however, I believe, our goal is the same - to provide a premier insurance regulatory environment which promotes the best insurance marketplace to serve consumers.

We are here to learn from one another how best to make that happen.

The NAIC believes strongly that the state regulatory system has served consumers well and should be the basis for our regulatory model. It is responsive at the local level, yet, tapped into national trends for uniformity and modernization. The state regulatory system is inherently strong when it comes to protecting consumers. We understand local needs and local market conditions. Yet we do agree there is a need to make the system more uniform, reciprocal, and efficient.

Toward that end, state regulators have been on time and on target in accomplishing changes needed to establish an efficient national system of insurance regulation.  In some areas, our goal is to achieve national uniformity because it makes sense for both consumers and insurers.  In areas where different standards among states are justified because they reflect regional consumer protection needs, we are harmonizing state regulatory procedures to facilitate compliance by insurers and agents doing business in those markets and working toward improved uniformity in process.

We have had successes in:

  • streamlining producer licensing and reciprocity.
  • creating a national insurance producer registry (NIPR).
  • making uniform company licensing systems via uniform filing requirements and electronic processing.
  • moving products more quickly to the marketplace by creating the System for Electronic Rate and Form Filing (SERFF). Average turnaround time for filings made via SERFF is only 17 days.
  • focusing on the benefits of uniformity in market conduct exams for consumer protections.
  • creating the Consumer Information Source (CIS) link on the NAIC Web site, allowing consumers to file complaints electronically, research complaint history of insurance companies and to search and download information on selected insurance companies.

We also recognize that good insurance regulation is always evolving. The NAIC takes its role of facilitator of that type of evolution very seriously. That is one reason why the NAIC has developed an amendment to the model producer licensing act calling for a producer's disclosure of insurer-paid fees in certain situations.  While it puzzles me that greater disclosure and transparency could be considered harmful - at least as to the consumer - we do acknowledge there are obvious differences between so-called "Main Street" independent agencies and the commercial brokers, and there are logistical realities for the main street agent that may be more problematic than for a commercial broker. I think we have carefully balanced these concerns in our draft model requirements, and in developing anything further we have to work together to keep the main street agent's concerns in mind.

At the heart of insurance is a promise - a promise of protection. It is important that consumers continue to have confidence in that promise. It is equally as important that their confidence is well placed and they are being well served. Again, we are all committed to those goals even if our paths sometimes differ in getting there.

On-going dialogue helps us keep the approach balanced from all perspectives. So enjoy the cherry blossoms, as well as, your discussions.  And as I have heard Garrison Keillor say,

"Do good work and keep in touch."

PIA Connection

This article originally appeared in the April 2005 PIA Connection.