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last updated on June 17, 2009

OFFICE OF INSURANCE INFORMATION

THE ISSUE

The creation of a federal Office of Insurance Information (OII) within the Department of the Treasury.

IT IS IMPORTANT BECAUSE

Prior to the Wall Street crisis, the debate on the issue of regulation of the insurance industry during the 110th Congress was primarily focused on the creation of an OII.

On March 31, 2008, the Treasury Department released its “Blueprint for a Modernized Financial Regulatory Structure.” The report made recommendations for short-, intermediate-, and long-term structural and operational changes affecting all sectors of financial services, including insurance. The report called for an immediate creation of an Office of Insurance Oversight within the Treasury Department. The new office would have been charged with the authority to address international regulatory issues and to provide advice and counsel on domestic and international policies affecting insurance.

Following the release of the Treasury Department blueprint, Rep. Paul Kanjorski, D-Pa., chairman of the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, introduced legislation that would create the OII. Although the legislation unanimously passed the Capital Markets Subcommittee, it was never considered by the full House of Representatives.

On May 22, 2009, Rep. Kanjorski reintroduced H.R. 2609, the Insurance Information Act of 2009. Six members of the House Financial Services Committee, including Rep. Judy Biggert, R-Ill., Ranking Member of the House Financial Services Subcommittee on Oversight and Investigations, joined as original cosponsors of the bill.

H.R. 2609 would create a federal Office of Insurance Information within the Department of the Treasury to provide advice and expertise on insurance regulation to the Administration and to Congress.

Specifically, the legislation would collect and analyze data on insurance; advise the Secretary of the Treasury on major domestic and international policy issues; report to Congress every two years, establish federal policy on international insurance matters; and, ensure that state insurance laws remain consistent with federal policy in coordinating international trade agreements.

The bill would also establish an Advisory Group to help inform and advise the head of the insurance information office. The group would be comprised of state regulators, consumer groups and other parties in the insurance industry.

A well-conceived OII would address federal information gaps about insurance regulation and assist Congress in overseeing the functional regulation of financial services. For instance, an OII could help federal policymakers monitor systemic risk throughout the financial services industry by providing a central repository to gather and analyze information already collected by state insurance regulators such as insurer investment activity, capital adequacy, and loss exposure.

LEGISLATIVE HISTORY

H.R. 5840, the Insurance Information Act of 2008, introduced by Kanjorski would have created an OII within the Treasury Department with jurisdiction for all lines of insurance except for health insurance to provide advice and counsel regarding domestic and international policy issues.

NAMIC lent its full support in helping the House Financial Services Committee pass the OII legislation. The legislation was expected to be placed on the House suspension calendar and passed. The suspension calendar is used for those pieces of legislation that are deemed non-controversial. However, due to timing and an over-crowded suspension calendar, the OII was not considered by the full House of Representatives.

NAMIC POSITION

NAMIC believes the creation of an OII could play an important role in the effort to streamline and modernize the state-based insurance regulatory system. NAMIC has worked closely with the sponsors to carefully balance the primacy of state regulation with the role of the federal government.

CONTACT INFORMATION

For more information please contact Marliss McManus, senior federal affairs director, at (202) 628-1558 or mmcmanus@namic.org.

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