House Subcommittee Holds Hearing on Options for Insurance Regulatory Reform
Chairman Kanjorski Announces Plans to Introduce Bill Creating Office of Insurance Information (OII)
Issue: Insurance Regulatory Reform
Date: April 17, 2008
Action Taken: Yesterday the U.S. House Financial Services Subcommittee on Capital Markets, Insurance, and Government-Sponsored Enterprises held a hearing entitled “Examining Proposals on Insurance Regulatory Reform.” The hearing looked at specific proposals to modernize the regulation of insurance. The subcommittee heard from two separate panels of witness. The first panel included Treasury Assistant Secretary for Financial Institutions David G. Nason who discussed the recently unveiled Treasury Blueprint that calls for the creation of an optional federal charter (OFC) for insurance.
Also on the panel was New York Superintendent of Insurance Eric Dinallo, who testified about the progress that has been made by the NAIC to improve and modernize insurance regulation. Testifying on the second panel were several industry representatives who discussed a wide range of potential regulatory reform proposals, including optional federal charter, NARAB II, and the Interstate Compact. Look for a complete report on this hearing in the upcoming edition of GovTalk.
Of great interest at the hearing was Chairman Paul Kanjorski’s (D-PA) announcement that he intends to introduce legislation today that would establish an Office of Insurance Information within the Treasury Department. According to Chairman Kanjorski, it has become apparent that “…the federal government lacks the expertise it needs on insurance policy.” Kanjorski went on to say that the OII would be structured to fulfill “the functions envisioned in the [Treasury] Blueprint for this office.”
Representatives Melissa Bean (D-IL) and Ed Royce (R-CA), sponsors of the National Insurance Act (H.R. 3200), which calls for the establishment of an OFC, both praised Chairman Kanjorski’s proposed legislation as “an intermediate step on the road to building a world-class federal insurance regulator as envisioned in [the National Insurance Act].”
Background: Yesterday’s hearing was the third in a series held by the Subcommittee examining insurance regulation reform. Prior hearings have focused on understanding the need for regulatory reform, whereas yesterday’s hearing focused primarily on options for reform. The Subcommittee intends to hold future hearings on this topic, and NAIFA staff will keep you updated on those hearings.
NAIFA's Position: NAIFA supports insurance regulatory reform and modernization that helps American families and businesses achieve financial security. Such proposals should promote consumer protection, streamline agent licensing, improve product speed to market, and improve the competitiveness of the insurance industry.
At its meeting on April 11, the NAIFA Board of Trustees voted to recommend conditional support for the concept of the optional federal charter (OFC) for insurance while continuing to support state-based regulation of insurance. The recommendation now goes to NAIFA’s National Council for its consideration and approval during the upcoming NAIFA Annual Convention and Career Conference, September 6-10 in San Diego.
NAIFA’s Education and Information Campaign:
- To learn more, please visit www.naifa.org/advocacy/irr
- To submit your views on insurance regulatory reform, please email regreform@naifa.org
NAIFA Staff Contact: For additional information, please contact Jill Edwards at jilledwards@naifa.org
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