New York Attorney General Eliot Spitzer said he would prefer to see the insurance industry’s state regulation transferred to federal authorities.
Insurance companies have historically been regulated by the individual states, but the Spitzer probe, as well as several others since launched by other states, has fanned suggestions that federal regulatory oversight might be needed, according to a Reuters report.
“The theoretical issue that I think will need to be dealt with is the state versus federal regulation of insurers,” Spitzer said at the Reuters Finance Summit. “It’s fair to say that state regulation has missed some important issues.”
Not surprisingly, Diane Koken, Pennsylvania Insurance Commissioner and currently the President of the National Association of Insurance Commissioners, said the “state insurance departments were aggressively involved (in the industry probe) and have been investigating many of these issues for some time.” Furthermore, Koken said federal regulators would not have caught on to the issues under investigation quickly enough. “I don’t think a federal regulator would have acted as quickly as the states did.”