From flooding and tornado catastrophes to the impact of the AIG bailout or the federal versus state regulation debate, Sean Dilweg has a lot on his plate as Wisconsin’s insurance commissioner. Appointed by Wisconsin Governor Jim Doyle on Jan. 1, 2007, Commissioner Dilweg is approaching the end of his second year in office. Currently the office has a staff of 135. In addition to its regulatory duties, the agency administers the State Life Insurance Fund, Local Government Property Insurance Fund and the Injured Patients and Families Compensation Fund.
In an interview with Insurance Journal’s Associate Editor Ken St. Onge at a recent National Association of Insurance Commissioners meeting, Dilweg talked about some of the top issues facing Wisconsin. Dilweg lauds Wisconsin as one of the most competitive insurance markets in the country, but readily admits that 3 large companies generally cover the market: Allstate, American Family and State Farm. Using the Minnesota bridge collapse as an example, Dilweg said that “the companies I just mentioned were involved in covering the damage to autos and property during that disaster, accounting for 70 percent of the market.”
Having said that, he also believes that state regulation remains a bright light in the AIG debacle and said that state guaranty funds were funded and ready if need be to provide a bailout of $20 million.
However, he does believe that the federal government did not have a choice in the way it handled the bailout.
At the recent National Association of Insurance Commissioners meeting, Dilweg, along with several other commissioners, discussed their strong support for state regulation and how the economic crisis highlights the effectiveness of state based regulation.
Dilweg also said that since the savings and loan crisis of the late ’70s, a lot of standards were put in place in every state that don’t allow the investment in some of the risky capital areas that were involved in the sub prime market.
“As I mentioned earlier, insurers also have the backstop of the state guaranty funds that provides the money to pay claims when a company becomes insolvent,” he added.
The Wisconsin commissioner is a firm supporter of state-based regulation as the best avenue to have a strong, competitive market, one that can react most quickly to changes or problems, which he believes helps the state’s 120 agents in their businesses and protects its consumers.
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