WASHINGTON (July 29, 2008) – Congress can play an important role in helping to streamline and improve the current insurance regulatory system without launching a complete overhaul. That’s the message the National Association of Mutual Insurance Companies (NAMIC) is delivering to members of the Senate Committee on Banking, Housing and Urban Affairs today as the committee holds a hearing to examine the state of the insurance industry with an eye toward the current regulatory and oversight structure.
“NAMIC supports targeted national uniformity efforts and opposes an optional federal charter at this time,” said Chuck Chamness, NAMIC’s president/CEO. “We believe reforming the current state-based regulatory system is best for insurance consumers and companies.”
Among the proposals NAMIC supports: legislation to create an Office of Insurance Information, as long as it is accompanied by the strongest confidentiality and privilege protections, is limited in scope, has a well-balanced advisory panel with limited preemptive authority, and is subject to congressional oversight. The bill, H.R. 5840, was introduced by Rep. Paul Kanjorski, D-Pa.., in June.
“Representative Kanjorski’s bill addresses two key points raised by proponents of an OFC: assuring that information on the insurance industry is available to the federal government – especially in times of crisis – and providing a process for agreements on international trade,” Chamness said. “Therefore, we believe the establishment of an OII diminishes the argument for an OFC.”
NAMIC also supports H.R. 1065, the Nonadmitted and Reinsurance Reform Act of 2007, to modernize the regulation of nonadmitted insurance and reinsurance companies, and H.R. 5611, the National Association of Registered Agents and Brokers Reform Act or NARAB II, which would establish licensing reciprocity for insurance producers that operate in multiple states.
“These proposals are great examples of ways Congress can have a limited role in helping to modernize the current state regulatory system,” Chamness said. “We would also encourage Congress to look at legislation to streamline company licensing for insurers that operate in multiple jurisdictions.”
While stakeholders should continue to focus on reform in the states, Chamness said the current regulatory system is not so in need of repair as to warrant a federal takeover. “The property/casualty insurance industry has never had a taxpayer bailout,” he said. “The same cannot be said for other divisions of the financial services industry that are regulated by the federal government.
“Insurance consumers are not clamoring for a federal overhaul of the insurance regulatory system,” Chamness said. “NAMIC supports changes on the state and federal levels that will result in much needed improvements to the current regulatory system without creating a new unnecessary layer of bureaucracy.”
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Posted: Tuesday, July 29, 2008 12:00:00 AM. Modified: Tuesday, July 24, 2012 12:19:03 PM.
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