Although it has not been officially announced, the leadership of the Senate Banking Committee has indicated that it would like to continue the mark up of its version of comprehensive financial services regulatory reform legislation on Tuesday, January 26, 2010. NAMIC has been closely involved throughout the creation of the Senate legislation and has been able to achieve significant improvements to the legislation that proposes to overhaul our current regulatory system.
Included in this bill is the creation of a new Office of National Insurance (ONI) under the Department of Treasury to coordinate federal insurance issues and negotiate international insurance agreements.
NAMIC had previously supported a House proposal for an Office of Insurance Information (OII), which would provide information and international coordination – while recognizing the primacy of state regulation and protecting confidential information. Because of NAMIC’s efforts, significant legislative changes were made early on to ensure that the ONI would closely resemble the original, non-regulatory OII, including the addition of a strong savings clause specifically stating that the new office is not intended to be a federal insurance regulator.
In addition, the legislation includes the creation of a new agency to oversee consumer financial products, the Consumer Financial Protection Agency (CFPA). Proponents argue the CFPA is necessary to protect consumers from abusive or deceptive credit cards practices, predatory mortgages, and other questionable lending products. NAMIC – along with the greater business community – opposes the creation of the CFPA because it creates an unnecessary new federal regulatory agency and threatens the financial services industry with confusing and burdensome dual regulation over consumer protections between the federal government and the states.
Due in large part to NAMIC’s advocacy efforts over the last year, the original CFPA language contained a general exclusion of insurance – but mortgage, title, and credit insurance remained in the bill. NAMIC has worked to educate members of Congress and their staff about these three lines of insurance and was able to get them explicitly exempted from the CFPA. It is expected that an amendment to do the same in the Senate will be offered and very likely accepted.
Also included within the comprehensive regulatory reform bill are provisions creating a systemic risk regulator and increased ability for the federal government to dissolve corporations deemed systemically significant, enhanced regulation of derivatives and strengthened investor protections.
The U.S. House of Representatives passed its version of this legislation in December before Congress adjourned for the holiday recess. As soon as the Senate passes a bill the two versions will need to be reconciled in conference before the legislation can be signed into law.
NAMIC continues to work in both houses of Congress to ensure that the final bill does not harm the mutual insurance industry with increased federal regulatory burdens.
Please direct questions to Dylan Jones.
Posted: Tuesday, January 05, 2010 12:00:00 AM.
317.875.5250 - Indianapolis | 202.628.1558 - Washington, D.C.