For the past five years I have worked providing regulatory compliance solutions to insurance firms. During that time I have had the opportunity to hear many views related to regulatory oversight. These come from a very diverse group of business people; single producers selling insurance from home–offices, brokers with small staffs selling to business, presidents of larger general agents representing many insurers, and CEO’s of multi-billion dollar publicly-traded firms.
I have identified some general themes. I have heard that...
- Insurance is a HIGHLY-regulated industry.
- Insurance is an overly-regulated industry.
- Regulations represents unfunded mandates from the government.
- Regulations (and the costs associated with complying with them) are cumbersome and should be diminished.
But what about the fact that billions and billions of dollars are generated annually by the insurance industry itself due to regulatory requirements to which it is subject?
How much insurance is sold because the government requires the purchase of a policy?
- Cars cannot be purchased or operated without proof of auto insurance.
- Mortgages cannot be legally acquired without mortgage insurance.
- Construction loans cannot be acquired without proper insurance.
I am not suggesting that insurance products sold to protect these types of risks are bad or not necessary, just that the relationship between insurance companies and regulators can be viewed as one of love-hate. True?
Written on Monday, 15 June 2009 17:01 by Administrator