Declarations

Chinese Drywall Concerns

“I believe you’re going to see this is widespread. Anytime you have mounting evidence of potentially toxic goods you have an obligation to act quickly to protect consumers.”

—U.S. Sen. Bill Nelson, D-Fla., a member of the Senate Commerce Committee that oversees the Consumer Product Safety Commission. Nelson and Sen. Mary Landrieu, D.-La., have filed legislation for a recall and immediate ban on tainted building products from China, as more and more people around the country are reporting problems in their homes built with imported drywall. Several lawsuits are pending.

Workers’ Comp Pressures

“During a recession, headcount is going down while the average weekly wage in all past recessions has continued to grow but at a much slower pace.”

—Harry Shuford, chief economist for the National Council on Compensation Insurance (NCCI), predicting that the economic and financial downturn will have a mixed impact on the workers’ compensation insurance market. He said recessions tend to place downward pressure on workers’ compensation exposure, which is primarily due to declines in employment and slower growth or declines in wage rates.

National Consumer Protection Needed

“The meltdown of insurance giant AIG and the broad crisis in the nation’s financial system serve as proof of the vital need for regulatory reform of the insurance sector. Numerous bipartisan reports on the nation’s capital markets have noted that insurance remains the only major segment of the capital markets not subject to federal regulation and reform is needed.”

—The statement by Rep. Melissa Bean, D-Ill., and Rep. Ed Royce, R-Calif., who introduced their bipartisan insurance regulation reform legislation called The National Insurance Consumer Protection Act (NICPA). The Act would create a robust federal regulator for insurance to act as an alternative to the antiquated, non-uniform system of state insurance regulators currently in operation, the legislators said in a statement. The legislation would create a federal regulator for insurance as an alternative to the state-based regulatory structure currently in place.

State-Based System Works

“State-based insurance regulation relies on high level principles-based and rules-based requirements and boots on the ground. We have supervisors, examiners, investigators, all close to the consumer and the industry, looking at activities from multiple angles to see any red flags as signs of trouble. A good example is American Insurance Group (AIG), where all the insurance subsidiaries remain strong, while the financial services companies have encountered extensive problems.”

—Hawaii Insurance Commissioner J.P. Schmidt purporting the need for state-based insurance regulation. Schmidt said the insurance regulatory regime presents a balanced model for reform in financial services. His speech at the 16th Annual Global Financial Conference focused on the current financial crisis and how it relates to the insurance industry.

Topics Legislation Workers' Compensation