NAIC: Pack Your Bags!

The National Association of Insurance Commissioners (NAIC) currently makes its home in Kansas City. For most situations, this works well, particularly with telecommuting, videoconferencing and e-mail. It even worked well in the old days of phone and fax.

But whether from the smog in the hot air or the fog on certain brains, Kansas City is not visible from Washington. It seems that to some in Congress, expertise doesn’t exist unless it cavorts on K Street. That’s why they think the country needs a big insurance information office in Washington.

Capital Markets Subcommittee Chairman Rep. Paul Kanjorski (D-Pa.) has introduced legislation that would establish an Office of Insurance Information. The Democrat’s proposal is similar to one contained in the Bush Treasury Department’s recent Blueprint for a Modernized Financial Regulatory Structure.

The otherwise sensible Kanjorski says Washington needs this office because Washington doesn’t understand the insurance business. “Shortly after Sept. 11, it became very clear to me that the federal government lacks the expertise it needs on insurance policy. Our experiences after Hurricane Katrina and the ongoing problems in the bond insurance marketplace have only reinforced my views,” he told a subcommittee.

According to Kanjorski, close to 90 insurance bills are currently before the Financial Services Committee. “Regardless of whether or not the federal government directly regulates insurance, we must educate ourselves on insurance policy and build a knowledge base in the federal government on these matters,” the Pennsylvania official said.

Hello, Washington! The country already has a knowledge base of information on all insurance policy and regulation. It’s called the NAIC. It’s been around since 1871. The NAIC has databases on financial results, consumer complaints and lots more. It has consumer offices in every state. It has people working for it who have insurance designations and college degrees. It even has people who know all about international insurance issues. Imagine! People outside Washington who know something!

The NAIC is superior to any federal office because its knowledge is derived from real businesses, markets and consumers — not from musing over martinis in Dupont Circle.

The one thing the NAIC doesn’t have is a fancy Capitol Hill penthouse presided over by an overpaid former politician who parties with Congressional lobbyists and staffers. The NAIC does have a Washington office but its presence is apparently much too subtle. The NAIC’s Washington office informs states about what’s going on in Washington but what it really needs to do is educate Washington about what’s going on in the states.

Kanjorski and others in Congress aren’t coming to Kansas City any time soon for a cocktail party. So why not save Congress the hassle of building a new bureaucracy and just move the NAIC to K Street now? The people will all have to move eventually anyway. Because if Washington insists upon creating its own federal insurance office, it’s going to need to lure all the best minds in insurance regulation to staff it. They’re all working in Kansas City and the state insurance offices across the country now.

So, NAIC, get it over with. Start packing.