Now hear me out as I play devil’s advocate for a second. Onecould argue today’s system of state-controlled insuranceregulations crawls along as an inefficient, sloppy patchwork ofrules and laws designed to fatten states’ coffers and provide cushyjobs to a power-happy bureaucracy that drains corporate resources,wastes money and, in the end, makes all of these products that muchmore expensive for the consumer.

Of course, this argument is propped up by the fact that dealingwith more than 50 different regulatory agencies—each with differentrules, regulations and personalities—is more than a full-time job.Entire departments of carriers across the country are tasked withdealing with changing regulations, differences in acceptablefilings, state reporting, licensing for the company and for agents,along with so many other various functions and requirements eachdifferent agency demands. A broker who does business across statelines must be licensed in each one, deal with each department ofinsurance, pay each state’s fees—which in some cases includes acounty-by-county fee—and understand and comply with each states’regulations when signing applications (just to name a few). Thesame is true for a third-party administrator, an enrollmentsoftware company, or anyone in any segment of the industry. Itleaves a lot less time for a broker or TPA to actually help theirclients.

Because of this regulatory quilt, a carrier might be licensed in49 states, or have a product in only 32, or have a product thatcovers five different conditions in 40 states and only three infour states and nine in one state—starting to sound like a Sudokupuzzle, huh? And with fewer states accepting group trusts onproducts it can create huge headaches.