State Versus Federal Regulation

The issue of state versus federal regulation has been widely discussed in the professional literature and by insurance regulators and public policy experts for more than 50 years. The states, however, continue to remain the primary supervisory body. However, because of the recent collapse of the financial services industry, especially commercial banks, during the historically severe 2007–2009 economic downswing, critics claim federal regulation would be superior to the present system.

Advantages of Federal Regulation

Critics maintain that the present system of regulation is broken, unduly complex, and costly, with considerable overlap and duplication in regulation. Major arguments for an increased federal role ...

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