State insurance departments are better consumer protectors than the federal government, according to Oregon State Insurance Administrator, Joel Ario. Ario, who was recently interviewed by the Insurance Journal, said while the federal government does play a role in protecting consumers, individual state departments are "better equipped" to handle insurance issues, simply because they're closer to those affected by the problem.

States also play in important role when it comes to developing new insurance laws and regulations. National programs are often built "on successful state experiments," Ario said, "It's in the nature of the 50 states to experiment in different kinds of ways. We're the laboratories of democracy."

The state of Oregon is certainly setting that precedent in regard to credit-based insurance scoring—rather than outlawing credit scoring altogether, the state imposed laws that allows credit scores to be used when writing new business, but not on existing clients. The system has worked so far, and if the measure passes on the General Election Ballot this November, it could set the stage for credit-based changes in other states.

And while the credit issue is certainly proof that state initiatives are major players in the national picture, Ario also contends that consumer protection is best done at the state level. "Insurance is one of those messy sort of products," he says. "A federal consumer protection call center is not nearly as good as state by state protections."

I have to agree; state departments of insurance (DOI) really take care of business. Because insurance law is regulated on a state-by-state basis, the DOI has more knowledge about insurance regulation, consumer rights and consumer protection laws as it pertains to that state, then just about any federally-based department.

Of course, not many people know that their state has a department of insurance—before working here at InsureMe, I had no idea. But state DOIs have a myriad of tips and resources available to residents, and are also the go-to department for any issues that might arise with an insurance company or agent.

Get better acquainted with your state DOI by visiting this state map, courtesy of the National Association of Insurance Commissioners.

[Source:] Insurance Journal