The Committee asked the NAIC to present its views and recommendations regarding the principles that should guide financial services legislation. My testimony identifies three key principles which we believe should be the basis for any Federal legislation intended to modernize financial supervision. The Committee also asked us to evaluate the draft legislative proposal prepared by the Committee s staff to see if it meets the principles of sound legislation. My testimony includes our comments on the Senate staff proposal under each of the principles discussed below. In addition, I will offer the NAIC s views on important insurance-related provisions in HR 10, because that bill has dominated Congressional debate on financial services legislation for more than two years.
Sound legislation depends upon sound principles and common sense.
Although many financial products especially insurance are quite complex, the principles for legislating a sound financial regulatory system are really very straight-forward. Those involved in the process definitely include the millions of people and companies in the United States who actually spend money to buy insurance. Shaking up the regulatory system must not result in shaking down consumers. A good financial services law must also permit sensible administration of its objectives by government regulators as new commercial products and fact situations emerge. Change is inevitable.