Excessive regulation and micromanagement of the insurance marketplace is a threat to consumers, charges David Snyder, VP and associate general counsel, public policy for the American Insurance Association (AIA).

“Some aspects of the current system are diametrically opposed to real consumer protection,” Snyder says. “This leads to reduced capital in the market, the inability to provide customers the products they need, regulatory overhead, prices that fail to reflect risk, and/or reduced competition.”

Snyder singled out rate and product approval as unduly onerous regulatory mandates, noting that they are often used to support litigation.

“The primary goals of insurance regulation should be to set and enforce adequate levels of solvency protection and to enforce contractual obligations,” said Snyder. “Allowing for market-based pricing, ensuring that government does not present an obstacle to new product offerings, and supporting insurers’ efforts to reduce societal risk of loss should be regulatory priorities as well.

Snyder’s comments coincide with his testify before the National Association of Insurance Commissioners (NAIC) at their Summer National Meeting.

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