State and Federal Regulation
Transamerica supports regulation that fosters transparency, promotes efficient and fair markets, and provides meaningful consumer protections. A careful balance is needed between inadequate and excessive regulation. Smart regulation allows for innovation in business models and products, provides effective consumer protections, avoids excessive cost and complexity, and harmonizes with other regulations.
Transamerica supports the current complementary approach to U.S. insurance regulation, under which insurance businesses are regulated primarily at the state level, and selected activities, products, and services are subject to federal regulation. We support efforts to make state regulation more efficient, consistent, and uniform across the states, while recognizing that states should have the authority to create more tailored approaches, when appropriate, for domiciliary companies.
Transamerica supports a “holistic" approach to systemic risk that avoids routine designations of a small number of large insurers as systemically important, leading to an additional layer of supervision and capital requirements. Most insurance-related activities that could contribute to financial instability are undertaken by a variety of firms, and it is not appropriate to penalize a subset of firms. We support the “holistic framework" for systemic risk that has been developed by the International Association of Insurance Supervisors and believe that it should be implemented consistently by all major jurisdictions, including the United States.
Care should also be taken that the “systemic risk" label is not indiscriminately applied to slowly emerging risks such as low interest rates and climate change. Although the risks are real, the regulatory framework and policy measures that have been developed in the context of systemic risk are unsuitable to address such risks.
Federal Insurance Office
Transamerica supports the Federal Insurance Office, its monitoring of the insurance sector, and its authority to represent the United States on prudential aspects of international insurance matters. FIO should remain an advisory arm and information conduit for the federal government on insurance-related issues and should avoid assuming responsibilities that are rightfully the purview of state insurance regulators. FIO should support the state-based regulatory system, and FIO's responsibilities should include offering advice to federal agencies regarding the impact of proposed regulation on the insurance business.
Transamerica also supports the existence and work of the Federal Advisory Committee on Insurance, which provides advice and recommendations to assist FIO in carrying out its statutory authority.
Transamerica supports the U.S.-EU Covered Agreement, which restricts extra-territorial application of EU and U.S. insurance regulations outside their respective markets. In particular, Transamerica supports the restriction in the Covered Agreement of states’ authority to regulate foreign affiliates of U.S. insurance companies as part of its group supervision regulation and subject the foreign group to the state group capital calculation.
Protection of customer and company non-public information against data breaches and cyber-attacks is critically important. Transamerica supports policies for effective and efficient cyber defense, as well as to protect the privacy of customer non-public information; harmonization of regulations arising from multiple regulators; and coordinated development of International Cybersecurity, Data and Technology Principles.
A national solution to safeguard consumers’ private information is required; the current patchwork of state-by-state privacy laws with different requirements only serves to confuse, frustrate, and harm consumers, while at the same time stifling innovation. A federal, preemptive data privacy standard will ensure consumers benefit from innovation while uniformly protecting Americans’ privacy.
Transamerica supports federal legislation that would establish important legal certainty by creating safe harbor protections for life insurers and other financial institutions to provide insurance and other financial products and services in connection with legitimate cannabis-related businesses that are legal under their respective governing state laws. Continued uncertainty regarding potential violations of federal laws (under which cannabis remains illegal) jeopardizes access to much-needed insurance products and services to these legitimate businesses and hinders their ability to promote the financial wellbeing and retirement security of their employees.
Transamerica supports the existing distribution models of insurance companies, which are predicated on an independent contractor and statutory employee model, and believes that licensed insurance producers should be exempt from any federal legislation that would amend the definition of an independent contractor. Independent contractors are crucial to the delivery of life insurance and financial security products, and legislation that would amend the definition of an employee would constrain the consumer benefits the life insurance industry and Transamerica provides by making it harder for our products to be distributed.
Insurance producers, independent broker-dealers, and independent financial advisors operate in a heavily regulated industry, and are given the ability to exert greater control over the existing means of their independent operations. Because of the unique nature in which these insurance producers, IBDs, and IFAs operate, Congress has traditionally left the regulation of the business of insurance – including the licensure and regulation of our products – to the states, under the McCarran-Ferguson Act.
Registered Index Linked Annuities
Transamerica supports federal legislation directing the SEC to develop and implement a dedicated registration statement for Registered Index Linked Annuities instead of requiring issuers of such products to complete the more burdensome (and unnecessary) S-1 and S-3 registration statements used for registering stock with the SEC. Such a change would reduce administrative expenses for insurers and benefit RILA purchasers.