Leaders within the US insurance industry are venting their frustrations over regulation creep overburdening the sector with inappropriate restraints.
At the Property and Casualty Insurers conference in Florida this week, Robert Gordon, senior vice president of policy development and research at PCI (Property and Casualty Insurers Association of America), sounded the alarm on universal policies.
“The increase and encroachment of the federal government and international standards setters has really been a top issue for our members for the last several years,” he said. “PCI was one of the first trade associations to go to congress and sound the alarm bells that a number of constraints of our current US insurance system were being jeopardized, in particular solutions that were being developed globally for the banking system might not be appropriate for within the United States for insurance regulation.”
As it stands, insurance regulatory law is governed by the state, but federal law also has a role to play because, despite being a private industry, insurance rules must protect the public’s best interests.
But insurers have long expressed concern about over regulation, with too many bodies influencing their policies. Regulations that impose banking-type restrictions, tighten requirements on cyber protections and focus on insurers' financial volatility are making the industry more difficult to navigate.
A common complaint is that regulations are set by authorities that don't understand the sector and can be counter-productive.
"A lot of the government efforts are just to do something in a not so constructive way and we're trying to make sure the marketplace is free to innovate and develop and appropriately fill consumer needs," said Robert Gordon Senior, vice president of policy development and research at PCI.
Terrence Cavanaugh, president and CEO of Erie Insurance Group and chair of the board of governors at PCI, said that while all industries look forward to making sure there’s an objective, independent voice that helps the marketplace conduct itself effectively for its own good and the consumers, the industry should be “making sure that we have appropriate regulation dealt with by individuals that understand the business and I think if we do that everybody will be well served.”
Michael Quigley, head of property at Munich RE said ultimately it is all about communication, that regulation is followed but that it fits the business.
“From a re-insurance perspective, I think there are great opportunities for us to work with our primary carriers and when we look at some of the under insured risks that are partly government supplied, we have to work with regulators to find ways to bring products that meet customers' needs but also that also fit within the regulation of our business.”
