WASHINGTON (Nov. 10, 2009) The National Association of Mutual Insurance Companies (NAMIC) responded to the introduction of legislation to revamp our nation's financial services regulatory structure released today by Senate Banking committee Chairman Christopher Dodd, D-Conn.
“Sen. Dodd has proposed a historic restructuring of the financial regulatory system, and he should be applauded for his work. While we may have some concerns about this bill, NAMIC understands that the economic crisis of the past year was the result of complex problems that will require complex solutions,” said Jimi Grande, senior vice president of federal and political affairs for NAMIC. “However, virtually every examination of what happened last year has found that property/casualty insurance played no significant role in the crisis and that property/casualty insurers inherently pose no systemic risk to the economy.”
NAMIC remains committed to a reformed state-based insurance regulatory system, and has indicated that a properly constructed, non-regulatory federal insurance office could help streamline and create more uniformity in that system. “The state regulatory system protected consumers throughout the economic downturn by ensuring that their insurance companies were financially stable and would meet their obligations when needed. NAMIC has some concern that the powers granted in the bill to this new federal office could have unintended negative consequences for consumers.”
However, NAMIC welcomed the inclusion in the legislation of provisions clarifying the regulation of non-admitted, or surplus lines, insurance for multi-state risks. This provision would establish the home state of the risk as the primary regulator governing a multi-state risk, providing regulatory clarity and simpler taxation, and is similar to HR 2571, the Non-Admitted and Reinsurance Reform Act, that has already been passed by the House. “If enacted, this provision would provide much needed clarity to the surplus lines market that would benefit insurers, their policyholders and the economy,” said Grande. “As the legislative process moves forward, we are committed to working with Chairman Dodd, Ranking Member Shelby and the other members of the committee to help focus reform on those faults in the system that led to the economic crisis.”
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