Conn. Governor Defends State-Led Insurance Regulation

Connecticut Gov. Dannel P. Malloy recently told a crowd of U.S. and international regulators that when it comes to insurance regulation, states are “here are stay” and that the states – not the federal government – will have the last word on whether international standards will become a reality in the U.S.

Malloy offered his remarks at the National Association of Insurance Commissioners’ International Insurance Forum in Washington, D.C., on May 13. The event drew more than 250 U.S. and international insurance regulators, consumer advocates, academics and industry leaders.

“We’re not very far from our National Archives where the U.S. Constitution resides, so I will spare you the lecture in American federalism. But suffice it to say that our regulatory structure is not an accident or an afterthought, but a well-reasoned construct of federal and state law working together,” Malloy said.

Malloy noted that almost 70 years ago, the McCarran Ferguson Act laid out the initial roadmap whereby regulation of insurance was deferred to the states, and this was reaffirmed by subsequent Acts of Congress including the recent Dodd Frank Act.

“Some of you may be disappointed to hear this, but when it comes to insurance regulation, we, the states, are here to stay,” he said. “This means that, unless Congress ignores our 140-plus year track record and overcomes the resolute opposition of our nation’s governors, state legislatures, and state regulators, the states – and not the federal government – will have the last word on whether international standards will become a reality in this country.” He said the unique nature of insurance regulation in the U.S. has not been an impediment to delivering the best outcomes for consumers and the industry.

But Malloy also assured that he and other governors are committed to working with federal and international colleagues to make the industry fairer and more resilient.

“Before I leave you with the impression that I and my fellow governors are simply interested in defending the status quo, know that I take my home state’s reputation as the insurance capital seriously,” Malloy said, “and I fully appreciate the global and interconnected financial system that we are all working to make more fair and more resilient.”