Arkansas Insurance Commissioner Julie Benafield Bowman testified before the United States Senate Committee on Commerce, Science and Transportation on April 11 on the overall state of the property/casualty insurance market and its regulatory landscape.
Speaking in support of state-based insurance regulation, Bowman discussed regulators’ dual responsibility of ensuring the solvency of insurance companies, and making sure that those companies treat consumers and claimants fairly. She also addressed rate regulation and insurers’ claims settlement practices.
“The most important job of an insurance commissioner is to protect insurance consumers,” Bowman stated in her testimony before the committee in Washington, D.C. “This is accomplished by maintaining strong, cooperative regulatory oversight of insurer solvency and monitoring insurer marketing activities so that a healthy competitive marketplace exists,” she went on to say.
In her testimony, Bowman explained that rather than being one huge conglomerate, the insurance industry in the U.S. is made up of many “smaller markets that, when aggregated, yield a $1.35 trillion ‘marketplace.’ In comparison, the insurance market in Japan is roughly $475 billion and the UK is $300 billion. The largest state market is California with $124 billion in written premiums. Only Japan, the UK, France Germany and Italy have larger markets than California. Following California is New York with $116 billion, Florida with $92 billion and Texas with $82 billion. Of the top ten jurisdictions in the world, four are the states previously mentioned. My state, Arkansas, has $8.6 billion, slightly less than Poland and Mexico, but larger than the insurance markets in Argentina, Turkey, Israel and Thailand.”
She noted that even insurance markets within states are widely varied. As an example she described the differences in availability of earthquake coverage in her state. Residents of Western Arkansas, she said, “have no difficulty obtaining earthquake coverage, while the Eastern residents, particularly those living near the [New Madrid] fault line, have recently experienced some availability problems and the prices for the coverage, when offered, have risen sharply.”
Bowman pointed out that in spite of paying for record levels of catastrophes in 2004 and 2005, the financial health of the property and casualty insurance industry has never been better. She concluded her testimony by saying, “Our role as insurance commissioners is to foster an industry that prepares people before, and then provides for them after, some of the worst possible events that they may endure in their lifetime.”
Bowman, an active member of the National Association of Insurance Commissioners (NAIC), serves as vice chair of that organization’s Market Regulation and Consumer Affairs Committee. She is also a member of the NAIC’s Workers’ Compensation Task Force, the Speed to Market Task Force, and the Operational Efficiencies Working Group.
Bowman’s complete testimony may be viewed at: http://insurance.arkansas.gov/Administration/bowman_testimony.pdf.
Source: Arkansas Insurance Department
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