Why Insurance Regulation Will Eventually Change

Currently, states across this great country regulate insurance. For almost  a century, states have done a great job making sure consumers are protected and insurance companies are financially solvent. Now we are starting to see a push for more federal oversight of insurance. The new FIO (Federal Insurance Office) of the government is starting to elicit feedback from the industry on the current state regulation system. What this all means is that state regulation of insurance will change. Here are a two reasons why. State licensing is still a nightmare for agents/brokers and insurance companies. Currently in our agency, we have one full time person just handling the state licensing for the 30 states we are licensed in. The demand for ease of licensing will push a change in insurance regulation. Another reason is the demand from companies to be able to integrate their US products with overseas activities. Obviously the state system cannot handle insurance operations by US companies in other countries. Why is this a regulation issue? Well an insurance company could easily become financially susceptible from overseas operations and not be able to pay claims in the US. Change will certainly happen and how much the Feds are going to be involved will reveal itself as time moves on. Until next time be careful out there and know your risks. K

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