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27 J. Ins. Regul. 1 (2008-2009)

handle is hein.journals/jloins27 and id is 1 raw text is: Editor's Perspective These are historic times for the financial services industry, and likely to be pivotal for the future structure of financial services regulation. With a new President and a new Congress, all eyes are on Washington. In the insurance world, the National Association of Insurance Commissioners is focusing its attention on regulatory reform. In January, the NAIC announced it is moving its executive office to Washington and locating its CEO there. I am proud to be that new CEO, and this will be my last issue as editor of the Journal ofInsurance Regulation. I look forward to working with and on behalf of the states as they promote effective insurance regulation, to participating in the discussion over the future structure of financial services reform, and to working to achieve the proper role for insurance regulation within that structure. It has been my honor to serve as JIR editor and coeditor for the past three and a half years. It will also be my honor to work with the NAIC and state insurance regulators in these historical times. Our first article, by Professor Joseph Zimmerman, relates directly to the current discussion over regulatory reform in Washington. It is an invited article that was originally presented at Oxford University in January 2009. Professor Zimmerman is an eminent scholar in constitutional issues, federalism, and the relationship between the federal government and the states. In his article Dual Regulation: Is It Desirable? Professor Zimmerman examines the history of insurance regulation in the U.S. and the various arguments for and against an optional federal charter in insurance. He concludes that some of the criticisms of current state regulation are valid, but that federal regulation of financial institutions often has been ineffective. Instead of creating an optional federal charter, which would reduce the pressure on the states to improve their system, Professor Zimmerman recommends congressional action to encourage harmonization of state insurance regulation. He also provides several options Congress could consider using. This article is must reading for those interested in the current debate over the future of U.S. insurance regulation. Professors Laureen Regan, Sharon Tennyson and Mary Weiss offer some conclusions about the relationship between rate regulation and insured losses in automobile insurance. According to economic theory, a regulatory system that suppresses insurance prices below competitive levels, or provides significant premium subsidies for some consumers, can distort the incentives consumers have to behave prudently. By reducing the incentives for consumers to control losses, these distortions can actually increase losses. After an empirical analysis of automobile insurance claims and costs from 1990 through 1998, they find that loss costs are higher in rate-regulated states. This is consistent with the underlying theory and should be a caution to states in designing their systems of rate regulation. © 2009 National Association of Insurance Commissioners