States Fight Back as Federal Takeover of State Regulation Threatens

September 22, 2003

When I first became an insurance regulator in 1999, I was alarmed by the aggressive tone of those who were advocating for a takeover of state insurance regulation by the federal government. At that time, I mentioned to Mike Pickens, president of NAIC and state regulator for our neighboring state of Arkansas, that we needed a grassroots organization of states to combat the creeping encroachment of federal bureaucracy. As the pace of the federal takeover movement quickened, the NAIC took the initiative to partner with state regulators in forming a national, but state based, coalition to educate the members of Congress on the benefits and advantages of state insurance regulation. The new initiative was called ASSURE, the Alliance for Sound State Uniform Regulatory Efficiency.

At the heart of ASSURE is the bedrock principle that state insurance climates are unique, with marketplace and consumer considerations that can only be adequately addressed at the local level. The major focus of ASSURE activities is to communicate to the members of Congress the indisputable fact that each state and each Congressional district will suffer a great, multi-pronged loss if federal regulation of the insurance industry is allowed to become a reality. Just the financial loss to states as a result of a federal takeover would be staggering. Louisiana alone will lose more than $200 million annually if the federal government takes over insurance regulation. Add to that the fact that consumers in every state would lose their right to local protection and that the efficient state claims and regulatory processes now in place would become lost in the mire of federal bureaucracy.

The state-based organization structure of ASSURE is conducive to continuing regulatory uniformity measures already in place and implementing innovative new ones. Each participating state, and there are 17 of them so far, has a managing board headed by co-chairs who are appointed by the state regulator. In turn, the co-chairs appoint up to eight steering committee members made up of opinion leaders from areas such as community, business, industry, and government, including lawmakers. In addition, all interested individuals are urged to become grassroots level members of the organization. Membership is free, and individuals who join can choose the level of participation that is best for them. Through e-mail alerts, they will be given opportunities to do such things as contact their local media or visit with their members of Congress at home or in Washington, D.C.

ASSURE’s advocacy efforts will be limited to the single issue of state insurance regulation, and individual members will only be contacted after approval to do so is received from that state’s managing board.

There are those who say the federal takeover of insurance regulation is not a serious threat. I would remind them that there are several
measures under consideration in Congress that would bring the industry under federal control. The most alarming of these thus far is the bill filed in July by Sen. Fritz Hollings, D-S.C. Known as the Insurance Consumer Protection Act, S. 1373 calls for a five-person Federal Insurance Corporation in the Commerce Department. It would regulate all interstate lines of insurance, with the exception of some workers’ compensation programs. Areas coming under federal control would include rates setting, policy regulations, accounting standards, licensing examinations and financial solvency.

To take for granted the state-based system of insurance regulation we now have is irresponsible. It may be that none of the federal charter bills now in Congress will become law this time around if we do nothing. However, if we abdicate our responsibility to preserve states’ rights now, it is only a matter of time until the right bill will come along at the right time and we will lose state control of insurance regulation.

I would like to take this opportunity to thank the NAIC for providing the organizational support needed to help make our collective state
voices heard. An event designed to allow participating states to do just that was the FLY IN to Washington, D.C. ASSURE members from all across the country converged on the nation’s Capitol on Sept. 18 for a fast-paced schedule of meetings with members of Congress about the specifics of the growing threat of federal regulation in their home states, and to pledge our support to them if they join with us to make sure this federal takeover never happens.

For more information about ASSURE, contact your state regulator or log on to or

Robert Wooley is the Commissioner of Insurance for the state of Louisiana. In addition to ASSURE, he is a member of the NAIC consumer protection committees, Consumer Liaison Committee and the Small Face Amount Working Group.

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