Today, in a letter sent to the Director of the Federal Insurance Office (FIO), Rep. Ed Royce (R-CA), a senior member of the House Financial Services Committee, requested a review of the operations and structure of the National Association of Insurance Commissioners (NAIC), which currently labels itself the "home of U.S. insurance regulation." This review, Royce argues, is necessary prior to having a comprehensive discussion on the future U.S. insurance regulation. Rep. Royce issued the following statement regarding the letter:
"I have said for many years that the insurance regulatory regime in this country is out of date and inefficient. At the heart of that system is a non-profit 501(c)(3), the NAIC.
"Despite not having general Congressionally-authorized regulatory power, its recent actions would suggest it and its members believe it does, in fact, have said authority. And despite claims that most policy discussions are held in a public forum, meeting records suggests otherwise. These practices are problematic from a legal perspective as well as a good governance perspective. If they were a federal regulatory agency, there would be checks on their budget and their operations. Unfortunately, very few checks exist today on the NAIC.
"My "ask' to Director McRaith in this letter is simple: take a look at NAIC's structure, the actions it is taking, and its budgetary process. Does it have the necessary accountability? And as appropriate, highlight areas that are in need of improvement.
"It is my hope that Director McRaith's pending report on insurance modernization will kick off a debate on the future of insurance regulation in the U.S; however, I don't believe we can have that discussion without first conducting an analysis of one of the key players in the existing system."