The United States has the largest and most competitive insurance market in the world.
In fact, twenty-three of the individual states rank in the top fifty largest insurance markets globally. And the country’s regulatory regime, through which individual states regulate the industry for solvency and market conduct with the coordination of the National Association of Insurance Commissioners (NAIC), boasts a strong track record for protecting consumers while promoting competition.
Despite these strengths in the domestic market, recent international regulatory developments have had a strange undertone: it sometimes feels as though international authorities are pressuring U.S. regulators to adopt significant changes to the way they regulate insurers—and that they are doing so successfully.
This international incongruity was highlighted during a session at The Institutes CPCU Society 2016 Annual Meeting titled, “Regulation, or Political Interference, in the Global Insurance Markets?” Participants on this panel were Eric Nordman, CPCU, CIE director of the NAIC’s Regulatory Services Division and the Center for Insurance Policy and Research; Hawaii Insurance Commissioner Gordon Ito; and Praveen Sharma, managing director and global leader of Marsh’s Insurance Regulatory and Tax Consulting Practice.
A Complex But Connected System
Nordman kicked off the session by providing an overview of the U.S. insurance regulatory system. While many in the international regulatory community would like to view the United States as a single jurisdiction when it comes to insurance regulation, it is in fact more appropriate to recognize that the U.S. system is made up of fifty-six independent jurisdictions—the 50 states plus the District of Columbia and five territories—and to treat each as a separate country.
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