“They’re good products, my family owns them and they work well for us,” he said. “A consumer needs to understand what it is they’ve bought. They don’t need to understand every single point and feature of it, but they need to have a general understanding of how it works.”
In its study of insurance oversight, the Federal Insurance Office, or FIO, recommended eliminating big disparities in state rules. The group didn’t call for a U.S. takeover of insurance regulation. The government could set national standards while leaving enforcement to the states, or take a more direct role in some parts of the industry, the report said.
The extent of federal involvement should be determined by Congress, based on how much progress states make in improving oversight, according to the report.
Howard Mills, who was New York’s insurance watchdog and now works as chief adviser in Deloitte LLP’s insurance industry group, said the FIO report provides the states with added motivation to work together on topics such as captives and reserves that will be discussed at their Florida meeting this weekend.
“There’s an expectation that there’ll be kind of a challenge to the state regulatory system, from the FIO and the Feds in general, to do a better job at coordinating their activity,” Mills said. “That comes at a time that they’ve got some real dissension within the ranks” of state regulators.