NAIFA GovWatch

Reps. Bean and Royce Introduce Insurance Regulatory Reform Legislation

Issue: Insurance Regulatory Reform

Date: April 2, 2009

Action Taken: Today U.S. Representatives Melissa Bean (D-IL) and Ed Royce (R-CA) introduced the National Insurance Consumer Protection Act (NICPA). The bill is a new iteration of legislation the pair introduced in the last Congress to reform regulation of the insurance industry. Their previous bill, the National Insurance Act, was better known as the optional federal charter bill. The NICPA would continue to allow for an optional federal charter for insurance agents and companies, but adds provisions for enhanced consumer protections and the establishment of a new Financial Services Coordinating Council, that includes the new National Insurance Commissioner, to serve in an advisory capacity to a new systemic risk regulator.

For a summary of the policy changes to the bill (as provided by the bill’s sponsors) click here.

Background: On April 11, 2008 the NAIFA Board of Trustees recommended to NAIFA’s National Council, for its consideration and approval, to conditionally support the concept of an Optional Federal Charter (OFC) for insurance while continuing to support state-based regulation of insurance. On September 10, 2008 the National Council nearly unanimously voted to support the concept of an OFC provided that it meets the principles of our support. The principles include true agent choice, enhanced consumer protections, the preservation of state regulation and the establishment of a single federal entity with expertise in insurance matters.

Next Steps: NAIFA is currently preparing a comprehensive analysis of how the new bill will impact NAIFA members and will provide it to you as soon as possible. We are encouraged that Reps. Bean and Royce have included provisions both supported and recommended by NAIFA.

In a statement issued today by NAIFA President Cliff Wilson, CLU, ChFC, LUTCF, “NAIFA supports the introduction of the NICPA. Representatives Bean and Royce have taken great steps to incorporate the principles of NAIFA’s support into the bill. We are particularly happy with the enhanced consumer protection provisions of the bill, such as the inclusion of the NAIC Unfair Trade and Unfair Claims Settlement Practices Acts, as well as the call for increased accountability to Congress for the processing of complaints through the Office of National Insurance’s Division of Consumer Affairs. We look forward to continuing to engage Representatives Bean, Royce, and the other members of the House Financial Services Committee and the Congress as this process moves forward.”

For more information on NAIFA’s policies and activities regarding insurance regulatory reform efforts, please visit www.naifa.org/irr

NAIFA Staff Contact: For additional information please contact Jill Edwards at jilledwards@naifa.org, Assistant Vice President, Federal Government Relations.

Back to NAIFA GovWatch