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NAMIC CEO: Most Companies Oppose OFC, Congress Should Develop ‘National Targeted Uniformity’ as Alternative

WASHINGTON (Aug. 19, 2007) –In a letter sent to the members of the Senate Banking Committee, President/CEO Chuck Chamness of the National Association of Mutual Insurance Companies (NAMIC) says Congress can play an important but limited role in reforming the system of insurance regulation of the property/casualty industry at the state level.

“Testimony at the recent hearing could convey the impression that the industry is unified in support of a comprehensive federal role including establishment of an optional federal charter,” Chamness wrote. “In fact, the vast majority of property/casualty insurance companies and agents oppose the creation of an OFC; instead, they support a reformed system of insurance regulation at the state level.”

The committee held a hearing on insurance regulatory reform shortly before recessing for the August break. Chamness urged the panel to look for ways to improve the system without replacing the state-based regulatory structure.

“While we are opposed to an optional federal charter, NAMIC believes that by adopting a ‘national targeted uniformity’ approach Congress could play an important albeit limited role in achieving certain targeted reforms that the states have not yet undertaken,” Chamness said. “As the committee looks toward legislative initiatives, NAMIC supports several measures that reflect this approach.”

Among the legislative proposals NAMIC supports:

  • H.R. 1065, The Nonadmitted and Reinsurance Reform Act of 2007. Approved by the House last year, the bill would streamline regulation for nonadmitted insurance and reinsurance carriers and surplus lines companies.
  • H.R. 5611, the National Association of Registered Agents and Brokers Reform Act (NARAB II). The legislation, approved by the House Financial Services Committee, would provide a mechanism through which licensing, continuing education, and other insurance producer qualification requirements and conditions can be adopted and applied on a multi-state basis while preserving the rights of the states.
  • H.R. 5840, the Insurance Information Act. This would create an Office of Insurance Information within the Department of the Treasury. If properly constructed and contained, accompanied by the strongest confidentiality and privilege protections, limited in scope, coordinated with the advice of a well-balanced advisory panel, with limited preemptive authority and overseen by Congress, NAMIC believes an OII could play an important role in the effort to streamline and modernize the state-based insurance regulatory system, while recognizing and respecting the rightful and necessary role of state-based regulation.

“NAMIC believes that significant regulatory reforms are necessary to meet the needs of a dynamic, competitive, modern insurance marketplace,” Chamness said. “The package of targeted reforms outlined above is an immediate, effective, and appropriate means of advancing insurance regulatory reform.”

For further information, contact
Nancy Grover
Director - Media Relations
(202) 628-1558 Tel
(202) 628-1601 Fax
ngrover@namic.org

Posted: Tuesday, August 19, 2008 12:00:00 AM. Modified: Wednesday, August 20, 2008 9:44:08 AM.

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