Consumers of the property-casualty insurance industry have the best protection they need—the industry itself.

That’s what the Property Casualty Insurers Association of America (PCI) maintained in its testimony in front of the U.S. House Committee on Financial Services recently. PCI believes that the industry gives clients the strongest consumer protections of all financial services sectors and therefore does not need additional consumer products regulation.

Anyone who doubts that should look at the industry’s track record through its state-based regulatory system, argued David A. Sampson, PCI’s president and CEO.

“New federal standards will not improve upon the present state-based system,” Sampson stated. “Through the strong system of consumer protections, property-casualty insurers provide peace of mind to consumers in their decision making process and use of insurance products.”

Sampson also pointed out to committee members that any new federal protections administered by a proposed new regulatory agency would create a redundant, inefficient system that would ultimately saddle consumers with more costs and perhaps no benefit.

In his testimony, Sampson gave an overview for lawmakers of the comprehensive consumer protections already in place at the state level. For example, insurers must meet strict requirements before they are permitted to sell products, such as being financially sound, having a qualified management team, and employing staff with suitable credentials. In addition, states enact regulations on the products that cover such things as the kinds of insurance that can be sold, readability standards, cancellation and nonrenewal restrictions, consistency of products, and availability of buyer’s guides. Finally, the state-based regulatory system provides after-sale safeguards for protecting consumers’ premium dollars, such as rules regarding grounds for cancellation and consumer notification, financial regulations to ensure the insurer’s ability to meet policyholder obligations, and restrictions on unfair claims practices.

“Unlike mortgages or related financial services products, there is no gap or regulatory arbitrage in consumer protections for property-casualty insurance,” Sampson said. “Federal regulation of insurance in this area would inevitably conflict with state policy making and would likely result in more costs and red tape burdens that consumers would ultimately pay through higher premiums.”