Des Plaines, Ill. - Ernie Csiszar, president and chief executive officer (CEO) of the Property Casualty Insurers Association of America (PCI) is calling on insurers to re-think their approach to regulatory reform, saying that the issue will be a top priority for PCI in 2006. Csiszar made his remarks during the opening ceremony of the association's Annual Meeting in Chicago today."Because of our inability to make meaningful changes to the regulatory system, perhaps it's time to reassess our tactics and try an entirely new approach," said Csiszar. "All of us have been pointing out the flaws in the regulatory system for the past decade. It's disjointed, inefficient, stifles competition, expensive and antiquated. Most importantly, it is untenable in the long term and must change."
Csiszar said that 100 years of state regulation has resulted in, "a system that requires companies to ask permission to change the price of their product from 51 separate regulators, an ineffective national association of state regulators, and a range of state systems that varies from open competition in Illinois to a communist-style regulatory system in Massachusetts."
Csiszar pointed out that one of the biggest obstacles to improving the system for companies and consumers is the regulators and the insurers they regulate.
"Regulators have developed the attitude that they can get away with anything - even regulatory edicts that clearly exceed their authority - because companies will not stand up to them for fear of retribution," said Csiszar. "In all honesty, the biggest thing consumers need to be protected from is the actions of overzealous regulators."
Csiszar cautioned, however, that state regulators are almost out of time. He stressed that while the current debate over the TRIA extension and the federal response to Hurricanes Katrina and Rita may have temporarily moved insurance regulation to Congress' back burner, they won't be there for long.
"We must set the table for reform before insurance regulation becomes the next congressional crisis," added Csiszar. "We know what happens when Congress tries to resolve a crisis - the pendulum swings too far in one direction and it can often take years before it swings back. That means that we must demand meaningful change by defining how a well-regulated marketplace could be and should be structured and what benefits such a marketplace would deliver to consumers."
Source: PCI
