Balance Insurance Interests to Maintain Opportunities

June 3, 2009

Iowa Insurance Commissioner & VP of NAIC, says this is a time of opportunity.

In these tough economic times, it’s natural to turn inward, to seek safety in what we know and understand. As the media is filled with stories about bank failures and Wall Street losses, it’s easy to pull back and “lay low.” But for states like Iowa, this could well be a time of opportunity. Many states have a great story to tell in the area of financial services. And while, clearly, there is a need to be cautious and prudent in our overall strategy, the strength of this state has been in it’s diversity of economic development. Just consider the growth in wind energy along with ethanol development and Iowa continues to expand in areas that enhance the state’s overall financial blueprint.

So, how do we preserve the insurance industry and it’s important impact on this state, encourage its growth, yet always remember the need to protect consumers? How do we ensure consumers that the insurance products they purchased yesterday and the ones they will purchase tomorrow will be available and accessible when needed in the future? Here are a few thoughts.

First, regulators must balance the needs of consumers with the goals of the industry. This means that regulators must listen to consumers. What type of complaints or questions are we receiving about products and services being sold? Are we tracking trends? What is happening in other states?  What types of products and services are being offered in the other financial services markets?   

Likewise, we should encourage the insurance industry to meet with us to discuss potential new products. By allowing for informal discussions prior to the filing of a product, we can gain a greater understanding of the targeted market, the purpose of the new product and any special nuances or issues that may be difficult to explain to the average consumer. We can provide feedback that is helpful and constructive. A better product for consumers is the goal!

Second, regulators must maintain an “open door” policy for insurance carriers and consumers. Because of the nature of insurance regulation (a national system of state regulation) we need to understand carriers doing business in multiple states and the challenges this may bring. When a carrier comes to the regulator with an issue, the goal should be to effectively respond to the concern and try to find a resolution if possible. This “open door” policy works both ways. The regulator should also be prepared to notify the carriers when issues arise that affect the industry and its operations.

Consumers should also feel that the regulator is available to assist them when they have questions or concerns. Greater information about products, insurance companies or the individuals selling insurance products must be available. With so many forms of communication in today’s society, no consumer should feel that they can’t access their state regulator.

Third, education is a key to maintaining a strong and effective regulatory system. Whether it is the regulator learning about the needs of consumers or the new products from carriers or the consumers understanding their rights concerning a policy provision, it is vital that all parties understand and appreciate how insurance works. When all parties have greater knowledge of products and services, the appropriate insurance policies will be available and consumers will be confident about their purchases. 

Fourth and finally, solvency and consumer protection must always be viewed together. Without strong solvent carriers, the needs of consumers cannot be assured. That is why it is critical for any regulatory system to have a strong, knowledgeable staff of financial examiners in concert with a strong knowledgeable staff of consumer affairs analysts.  The checks and balances from this spectrum of the regulatory community will ensure that the needs of all are met in a fair, efficient and effective manner.

Our industry is evolving. Greater needs are being placed upon the financial services industry. Consumers are seeking innovative ways to protect their property, their businesses, their lives and their futures. Industry too is seeking ways to maintain a strong presence and deliver products and services that consumers will value. Now is not the time to shy away from the needs of our industry and our community.  Working together is the only way to ensure a future that benefits all Iowans. The balancing of consumer needs and the economic strength of Iowa and other states, and their insurance industry must always be at the forefront of any regulatory decision. While this may be a challenging goal, we must ever be mindful of this mission. Americans should expect no less.

Susan Voss was appointed Iowa Insurance Commissioner in 2005. Prior to her appointment as commissioner, she served as Iowa’s first deputy commissioner. Voss has held a number of different positions with state government, including assistant attorney general for the Iowa Department of Transportation, legal counsel to the state ombudsman, counsel to the Iowa Legislature in the area of taxation and economic development, and tax policy attorney for the Iowa Department of Revenue and Finance. She is a graduate of Simpson College in Indianola, Iowa, and earned a J.D. from Gonzaga University in Spokane, Wash.