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Iowa Urged to Halt Biden Administration’s Move Towards Unaffordable Life Insurance

Last year, an article in The highlighted strategies for Iowans to combat the Biden Administration’s assault on retirees and families—a persistent concern in Iowa. Governor Kim Reynolds and Insurance Commissioner Doug Ommen play pivotal roles in safeguarding Iowa families against this federal threat.

The core issue, as articulated by [source], revolves around the Biden Administration and unions pressuring the NAIC to dissuade financial institutions from maintaining affordable life insurance and annuity products for Americans. The NAIC, or National Association of Insurance Commissioners, functions as a multi-state entity setting standards for insurance and annuities across states and D.C. The apprehension stems from these quasi-regulators advocating measures that could stifle the industry with excessive regulations. Intensified restrictions on insurance providers may dissuade them from investing in financial instruments that contribute to affordable insurance costs.

While the NAIC doesn’t serve as a direct regulator, its recommendations hold weight and can translate into law if states comply. These determinations should ideally rest with Iowa lawmakers rather than being dictated by distant entities influenced by the Biden Administration. Notably, the organization comprises staff with backgrounds in state insurance regulation, not industry expertise, predisposing them towards regulatory inclinations as the panacea for all issues.

Regulators exhibit a penchant for control, evident in their attempts to coerce state insurance commissioners into discouraging life insurers from investing in lucrative ventures. Their directives aim to dissuade insurance companies from exploring investments in collateralized loan obligations, auto loan portfolios, student loans, and credit cards. Bureaucrats and left-leaning activists aspire to dictate investment decisions, overshadowing the insurers’ responsibility to ensure profitability and attract Iowa investors.

The prospect of acquiring a life insurance policy or annuity is seldom a desired necessity but rather a precautionary measure in unforeseen circumstances. An annuity, essentially a contract with an insurer, facilitates periodic payments to the policyholder, offering financial support during challenging times.

Commissioner Ommen has a unique opportunity to resist the liberal agenda seeking to second-guess Iowa insurers, enabling them to operate without restrictive regulatory frameworks that could undermine their profitability. Adherence to these new investment constraints could potentially exclude certain Iowans from insurance and annuity access, ultimately disadvantaging those most in need.

Concerns regarding these regulations extend beyond individual apprehensions. [source], a management consultancy, released a report critiquing a proposed equity capital increase from 30% to 45%, citing inconsistencies in risk assessment within the industry. The regulatory body of insurance commissioners vigorously advocates for higher equity capital requirements, a move that could diminish company profitability, further restricting Iowans’ access to desired insurance products.

These propositions are not novel and have previously failed in Europe, resulting in reduced product availability for consumers due to stringent regulations. Federal regulators, armed with such evidence, should veer away from initiatives that may superficially appear consumer-protective but could, in reality, escalate costs for insurers, consequently limiting future consumer access.

Governor Reynolds and Commissioner Ommen have a prime opportunity to challenge the NAIC, acting at the behest of the Biden Administration, to shield Iowa families from constrained choices and elevated insurance and annuity costs should the NAIC’s directives be enforced.