This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Allstate Seeks National Regulator of Insurers

While most financial services companies cringe at the thought of more regulation, Allstate (ALL - Get Report) CEO Tom Wilson on Wednesday is launching a very public campaign calling for national regulation of insurance companies.

That would be a huge change from the current system of state-by-state regulation, which creates many loopholes. Some of those gaps in regulation were exploited by American International Group (AIG - Get Report).

Starting Wednesday, Allstate is running print ads stating the case for national insurance regulation. One headline reads: "A man-made disaster just cost America trillions -- Here's How To Keep It From Happening Again." The text calls for reform of all financial institutions and the regulatory agencies that supervise them.

In a letter to the New York Times, Wilson notes that Allstate has little presence in the market for unregulated products that triggered the global financial collapse. Still, he writes: "We have a duty to help stabilize the financial system."

Charging that state regulators "lack the expertise to properly oversee rapid innovation or systemic risks," Wilson proposes that Congress establish one federal regulator for all national insurance companies.

The demand for one set of regulations is a bold one, especially for the insurance industry. The complexity of the current situation requires insurers to file individual policies on a state-by-state basis. Did you ever search for an individual health insurance policy, for example, and learn that some of the best deals weren't "approved" in your state?

Meeting all of those diverse requirements adds a huge layer of cost to the insurance buyer. In many states, insurance commissioners are elected officials, bagging huge campaign contributions from the industry. Elsewhere, they're career bureaucrats, hoping to protect their turf.

That's why a call from one of the largest national insurance companies, serving 17 million American households, is bound to create ripples in the industry. We'll see who climbs on board next.

Terry Savage is an expert on personal finance and also appears as a commentator on national television on issues related to investing and the financial markets. Savage's personal finance column in the Chicago Sun-Times is nationally syndicated. She was the first woman trader on the Chicago Board Options Exchange and is a registered investment adviser for stocks and futures. Savage currently serves as a director of the Chicago Mercantile Exchange Corp.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
ALL $69.86 -0.13%
AIG $58.28 0.94%
AAPL $129.45 0.39%
FB $78.93 -0.08%
GOOG $541.14 0.60%

Markets

DOW 18,084.11 +60.05 0.33%
S&P 500 2,117.01 +8.72 0.41%
NASDAQ 5,027.6450 +22.2540 0.44%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs