Declarations

Federal vs. state—AIG

“This argument is fundamentally flawed because it is based on a totally inaccurate assumption of facts. First and foremost, AIG is not an insurance company; it is a federally-regulated holding company under the jurisdiction of a federal regulator. It is AIG’s holding company — more specifically, its financial products division — that lies at the heart of AIG’s financial difficulties. And, its problems arose under the watch of a federal regulator…”

—National Association of Insurance Commissioners (NAIC) President and Kansas Insurance Commissioner Sandy Prager responds in a Wall Street Journal op-ed to charges that the AIG failure is the result of errant state regulation of insurance. State insurance commissioners also lashed out at members of Congress who are blaming state regulation for AIG’s problems and using the crisis to bolster their advocacy for federal regulation some believe. The state regulators spoke out at their annual meeting in Maryland in response to a Wall Street Journal opinion article authored by four members of Congress who support a federal charter for insurers: U.S. Senators John Sununu (R-N.H.) and Tim Johnson (D-N.D.) and House members, Reps. Melissa Bean (D-Ill.) and Ed Royce (R-Calif.). The Wall Street Journal op-ed suggested that the AIG problems were the result of a failure of state regulation.

Closing the Revolving Door

“We’ve got a lot of important insurance issues here in the state, and I think it’s important that the next insurance commissioner be there for the full four years.”

—Lawmaker and Democratic candidate for North Dakota insurance commissioner, Rep. Jasper Schneider, D-Fargo, is proposing to bar any state insurance commissioner who resigns from the job voluntarily from working in the insurance industry for one year afterward. He plans to file the bill draft in December. Republican Insurance Commissioner Adam Hamm, who was appointed to the office last year after Jim Poolman quit early to take a job in the industry, agrees with the idea, but not necessarily the legislation. Schneider said 35 states have so-called “revolving door” legislation, including Montana and South Dakota.

Mississippi River Woes

“We have concerns with the piecemeal approach being used to implement the program, particularly in Illinois, and its effect on economic development and home ownership.”

—Illinois residents and businesses in the St. Louis metropolitan area will not be forced to pay more for flood insurance than counterparts on the Missouri side of the Mississippi River, the Federal Emergency Management Agency decided. Illinois lawmakers objected to even the consideration of such a decision and sent notice to FEMA. FEMA came back with a decision that low-income Illinoisans won’t be required to purchase flood insurance until both sides of the river have had a chance to appeal their newly drawn flood maps, though Illinois residents are still encouraged have insurance.

Topics Legislation Illinois AIG