Citing better global representation and effective consumer protection, insurance executives sang the praises of federal regulation of the industry today.
“Ultimately, the consumer ought to benefit from greater regulation, provided that we heed the lesson of the current crisis,” said Christopher “Kip” Condron, president and chief executive of AXA Financial Inc. in New York.
He spoke at the 19th annual Executive Conference for the Life Insurance Industry in New York. Accounting firm Ernst & Young LLP and law firm Dewey & LeBoeuf LLP, both in New York, sponsored the event.
The nationalization of American International Group Inc. of New York points to a convergence of two issues: regulatory reform and a solution to the retirement crisis, Mr. Condron observed.
“With the federal takeover of
AIG, we have our first nationalized multiline insurer,” he said.
“Clearly now is the time for government and the financial industry to work together to find ways to head off a potential spiral into chronic old age poverty.”, Mr. Condron said.
Different standards across the United States don’t help customers, while a “level playing field” of federal regulation would favor well-run companies, he noted.
It would also help with global perceptions of the U.S. insurance market. “We’ve been criticized abroad for not having a single regulatory voice or entity that can speak for the market,” Mr. Condron said.
The federal help extended to
AIG, which has ballooned to about $150 billion, plus help that may be extended to other insurers, points the way to some form of federal regulation, he added.
That opinion was echoed by Gary C. Bhojwani, president and CEO of Allianz Life Insurance Company of North America in Minneapolis, who said that the carrier is a consistent public supporter of the optional federal charter.
“There was more progress made on the life side this year, and I think it has a real chance of passing and becoming a reality,” he said.
The current proposal for a federal office of insurance information was a reasonable start as an interim step, Mr. Bhojwani added.
