The House Financial Services Committee could begin work on legislation that would create a new Federal Insurance Office as early as tomorrow, November 4. The Federal Insurance Office Act would create the new office under the Department of Treasury to coordinate federal insurance issues and negotiate international insurance agreements. NAMIC continues to have serious reservations with the bill in its current form.
NAMIC supported the original proposal for an Office of Insurance Information, which would provide information and international coordination – while recognizing the primacy of state regulation and protecting confidential information. The proposed FIO, however, would have broader authority to reach agreements with foreign insurance companies that pre-empt state laws and regulations, potentially allowing those companies to operate under different standards than domestic insurance companies.
Earlier this month, NAMIC submitted testimony to the committee on its concerns with the proposed FIO. In addition to pre-emption, the testimony also expressed concerns regarding the broad authority the draft would create for data collection and the potential for a perceived mandate for the proposed office to name an insurance company as systemically significant. In sum, the office under the new draft could result in the creation of a quasi-federal insurance regulator.
There is the potential that FIO could distort insurance markets and ultimately harm consumers. NAMIC believes that an Office of Insurance Information as proposed by the original bill would provide the federal government with the information it needs without affecting the market or creating a costly, duplicative regulatory scheme.
Legislation to create the FIO was originally scheduled to be brought before the committee the week of October 19, but the House Committee on Ways & Means claimed jurisdiction over the sections of the bill addressing negotiations on international agreements because they relate to trade and expressed concerns with the way those sections are currently drafted.
While this jurisdictional conflict does not yet seem to be resolved, the House Financial Services Committee has signaled its intention to take up this legislation as soon as it can. NAMIC will continue to fight to see that our concerns are addressed as the bill begins to move through the committee and to the floor.
Please direct questions to Marliss McManus.
Posted: Tuesday, November 03, 2009 12:00:00 AM. Modified: Tuesday, November 03, 2009 1:50:54 PM.
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