Nelson: State Regulation Will Not Be Subservient to Solvency II:

Ben Nelson, CEO of the National Association of Insurance Commissioners (NAIC), said the U.S.’s state-based system will not become subservient to Solvency II regulations. Nelson made the remark in an interview with A.M. Best during the NAIC’s fall national meeting. The U.S. Trade Representative and Treasury Department are going to negotiate a covered agreement with the European Union E.U. and Nelson said that in achieving some measure of equivalence, “the state-based system is not going to become subservient to Solvency II. It’s not.”

During a wide-ranging interview for an article in an upcoming PIA Connection, Sen. Nelson told PIA National senior vice president of industry affairs Patricia A. Borowski that the bigger threat to state-based insurance regulation these days comes from the E.U. in the form of Solvency II.

“They [the E.U.] are now in a position that they feel they can dictate that you have to be equivalent,” Nelson said. “But there’s a difference between equivalent results and equivalent structure. Each group is comfortable with their own system because they know how it works. That I understand, but to try to export Solvency II to the United States is a failed effort because the different scope of what the protection is, is monumental. They protect the entity, we protect the public. So, if you can’t recognize and accept that difference, then you could be easily misled thinking that it wouldn’t hurt us to adopt their system. Well, yes it would. Yes it would.”