Independent Agents: State Regulation Big Issue in 2009

The New Year always brings out great hope for a new beginning, a fresh start and greater resolve for the coming year. But with all the financial and economic turmoil of the second half of 2008, independent agents could find it harder to be upbeat about 2009.

National Association of Professional Insurance Agents President Kenneth Auerbach, however, has a different take on the coming year (see page 46, Closing Quote, “Eye on Insurance Industry Regulation“).

“While it is clear that our nation is moving through a nasty recession, independent insurance agents should be mindful of their position relative to the other sectors of financial services. Our industry’s fiscal house is in good order,” PIA President Auerbach said.

Auerbach points out that the advocates of federal regulation of insurance are perversely pointing to insurance (the only financial services sector that has largely been insulated from the worst of the financial carnage), saying the market meltdown proves that insurance should be federally regulated.

“That’s a little like a drunk who caused a bad traffic accident saying that the other drivers who remained sober need to start drinking and driving,” he quips.

Auerbach points out that that the economic crisis proves insurance should not be brought into the federal system, because federal regulators failed so miserably in their responsibilities and obligations to supervise banking, securities and capital markets for financial soundness and the public good.

He reminds agents that the National Conference of Insurance Legislators (NCOIL) and other organizations also say the solvency and soundness of the industry are proof of the importance of maintaining state regulation of insurance.

Finally, he encourages independent agents to work together not only on this issue but on others as the industry faces the challenges of a new federal administration and the economic crisis both here and abroad.

“It’s a good time to be an independent agent” Auerbach says.

Who can argue with that positive message???