WASHINGTON (March 15, 2010) – The National Association of Mutual Insurance Companies (NAMIC) remains concerned about the latest version of financial services reform legislation unveiled by Sen. Chris Dodd, D-Conn., on Monday, specifically with regards to the powers granted to the proposed Office of National Insurance.
“While we remain concerned about some provisions in the bill, NAMIC applauds Sen. Dodd for his effort to address the problems in our financial regulatory system that contributed to the economic crisis we face today,” said Jimi Grande, senior vice president of federal and political affairs for NAMIC. “It is important to remember, however, that virtually every examination of the crisis has shown that property/casualty insurers played no role in creating the crisis and pose no systemic risk to the overall economy.”
A remaining concern for NAMIC is the broad subpoena authority granted to the proposed Office of National Insurance created by the legislation. Although the legislation states specifically that the ONI would not serve in any regulatory or supervisory capacity with regards to the industry, it would still grant it the subpoena authority to compel companies to produce data.
“Insurance is the most regulated industry in the country, and there is no shortage of data that would be available to the ONI either publicly or through the National Association of Insurance Commissioners,” Grande said. “The use of subpoena authority in this context could have unintended negative consequences by creating a duplicate and excessive process that would ultimately harm the consumer it seeks to protect.”
One area in which the new legislation has addressed NAMIC’s concerns is in the establishment of a new consumer protection agency, which under Sen. Dodd’s bill would be housed within the Federal Reserve. Echoing the version passed by the house, Sen. Dodd’s bill recognizes the strong consumer protections of the state-based regulatory system and excludes property/casualty insurance from the jurisdiction of this new federal agency.
“As with the stand alone agency that would be created by the House legislation, Sen. Dodd’s bill respects the strong regime of consumer protections with regard to property/casualty insurance at the state level,” said Grande. “This will help avoid regulatory confusion and ensure a more responsive consumer protection system.”
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Posted: Monday, March 15, 2010 3:59:56 PM. Modified: Friday, March 26, 2010 3:59:56 PM.
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