U.S. System Deserves Mutual Recognition From Europe
Speaking with A.M. Best at the National Association of Insurance Commissioners' (NAIC) Summer National Meeting, Iowa Insurance Commissioner Nick Gerhart, a member of the NAIC's International Insurance Relations Committee, said the U.S. state-based insurance system deserves mutual recognition from European regulators attempting to create new international regulations.
"I was part of an EU/U.S. dialogue in Frankfort, Germany, where [NAIC CEO] Sen. [Ben] Nelson and I were the two representatives for the U.S., and we spent the better part of a day educating our European counterparts on how our market works and the capital standards, and why some of the things that they're working on at the IAIS with the capital standards — and why Solvency II in particular — wouldn't work in the United States," said Gerhart.
Gerhart said that in the United States when insurers fail, there is a guaranty association that steps in to protect consumers, and "we have incredible rights as regulators to take over a company to try and rehabilitate it or, if we also have to, liquidate it. But we have a lot of protections for the consumer."