Insurers Face Off Over Fed Charter

Thursday, October 31st, 2002 Legislation & Regulation

Comparing the state of the U.S. insurance regulatory system to Humpty Dumpty--broken and irreparable--a USAA executive contends that the best method to encourage modernization is to create a strong federal option, although not all insurers here agreed. Increasingly, insurers are regulated by state courts, rather than insurance commissioners who are supposed to be carrying out the intent of state legislatures, according to Bradford W. Rich, senior vice president, general counsel and secretary for the U.S. Automobile Association in San Antonio, Texas. "Plaintiffs‘ lawyers dream up new causes of action and new insurance policy interpretations, and the courts become the surrogate regulators," he said.

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