As Florida's insurance industry and lawmakers gear up for the coming legislative session, a trade association for risk managers is asking for more sweeping reform. The Risk and Insurance Management Society, Inc. wants the federal government to promulgate uniform, national regulations for commercial insurance.
In mid-December, RIMS submitted a comment letter to the U.S. Department of the Treasury supporting its proposal. The organization believes that consumers would be better served by one set of procedures than they are now by the "state-by-state patchwork" of insurance laws. The lack of consistency results in additional costs and procedural inefficiencies for commercial customers, RIMS claims.
More importantly, the state-specific approach makes it difficult for those customers to purchase the appropriate type and amount of insurance. Small companies are at a particular disadvantage, as they haven't the resources or the expertise to investigate their insurance needs.
The letter specifically asks that the Federal Insurance Office actively support uniform regulations in the agency's upcoming report to Congress. RIMS complains that state legislatures and insurance departments regularly stray from federal standards and model laws, either deliberately or unintentionally. If Congress were to restate its intention that states adopt uniform insurance rules, the states would be less likely to go their own ways.
RIMS also suggests that all of the inconsistencies in licensing requirements and new product entry serve as disincentives to companies interested in entering the U.S. insurance market. The smaller the insurance market, the harder it is for customers, including Florida businesses, to keep insurance costs down.
The Federal Insurance Office was created under the Dodd-Frank Wall Street Reform and Consumer Protection Act. While the office monitors the insurance industry, it does not make or enforce insurance laws or regulations.
Source: Business Insurance, "RIMS wants more uniform, national insurance regulations," Rodd Zolkos, Dec. 15, 2011