Add the National Association of Insurance and Financial Advisors (NAIFA) to the list of industry groups who oppose any federal regulation of insurance products—and have gone to Capitol Hill to say so.

Cliff F. Wilson, president of NAIFA, recently testified in the “Regulatory Restructuring: Enhancing Consumer Financial Products Regulation” hearing held by the U.S. House Committee on Financial Services. He stated that because insurance products are already sufficiently regulated by the states, they should not be placed under the authority of the proposed federal Consumer Products Safety Commission.

However, Wilson also acknowledged the need for improved regulatory oversight of products and services that have been un-regulated or under-regulated in the past. But such products and services, Wilson said, are financial, not insurance.

Through its white paper, “Financial Regulatory Reform: A New Foundation,” the Obama administration seeks the creation of an independent regulator to oversee the soundness of financial products. Among the questions the House Committee is undertaking is whether insurance products should fall under the jurisdiction of such a regulator.

According to NAIFA’s position, insurance products should not fall under the proposed Consumer Product Safety Commission for three reasons:

1. Insurance products are subject to comprehensive state regulatory oversight; therefore, federal intervention is not needed and could result in regulatory confusion.
2. Separation of insurance product regulation from insurance solvency regulation is dangerous.
3. Federal financial product oversight should be addressed only as part of a comprehensive review of insurance regulation.