WASHINGTON (July 25, 2007) — The National Association of Mutual Insurance Companies (NAMIC) today reiterated its stance against an optional federal charter to regulate the business of insurance. The comments came in response to a bill proposed by Reps. Mellissa Bean, D-Ill., and Ed Royce, R-Calif.
“NAMIC remains steadfastly opposed to an OFC,” said Justin Roth, NAMIC senior federal affairs director. “There is nothing to be gained, except more bureaucracy and confusion for insurance consumers.”
The measure, the National Insurance Act of 2007, would create a new federal agency to administer a regulatory system, giving insurers the option of being regulated by this new system or continuing to be regulated by the states.
“NAMIC urges Congress to strongly consider this issue before moving too quickly and uprooting a system that has been in existence for more than 150 years, and has the overwhelming support of property/casualty companies and agents alike,” Roth said. “An OFC could have a devastating impact on the insurance industry.”
“NAMIC supports less regulation, and strongly advocates for the end of price controls at the state level,” Roth explained. However, NAMIC believes it is unlikely that this Congress would pass an OFC bill that includes rate deregulation and fewer consumer protections.
“While this bill might be introduced with the best of intentions, the final product will most likely have a regulatory scheme that looks more like Rep. Royce’s home state of California than it would that of Rep. Bean’s home state of Illinois.” Roth explained that California’s insurance regulatory system is cumbersome and over-regulated – to the detriment of policyholders as well as insurance companies.
“While we acknowledge that the current regulatory system must be reformed, we think that those reforms can take place at the state level rather then creating an additional layer of federal bureaucracy that the insurance industry and its consumers would have to deal with,” Roth said.
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Posted: Wednesday, July 25, 2007 12:00:00 AM. Modified: Wednesday, July 25, 2007 10:43:30 AM.
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