Insurance High On House Committee Agenda

By Steven Brostoff, Washington Editor

NU Online News Service, Feb. 5, 4:27 p.m.EST?The House Financial Services Committee has releasedplans for an aggressive insurance-related agenda during the 108thCongress, including examination of state regulation, terrorisminsurance, toxic mold and credit scoring.

In an oversight plan published last week, Committee ChairmanMike Oxley, R-Ohio, said the plan reflects areas where theCommittee and its subcommittees expect to conduct oversight overthe next two years.

The insurance industry takes up a significant part of the plan,starting with insurance solvency.

The Committee said it will continue its examination of thesolvency accreditation program of the National Association ofInsurance Commissioners in Kansas City, Mo., focusing on the stepstaken by NAIC to update the program since its inception in theearly 1990s.

Similarly, the Committee said, it will examine such issues asthe quality of market conduct regulation, agent licensing andproduct approval.

In particular, the Committee said, it will consider what furthermeasures might be necessary to promote uniformity in agentlicensing.

More broadly, the Committee said it will review variousproposals for modernizing insurance regulation, includingstate-by-state improvements, coordination of state regulationthrough the NAIC, federal promotion of state uniformity andoptional federal chartering.

The Committee said it also plans to examine state consumerprotection efforts.

On terrorism insurance, the Committee says it will monitor themarketplace and implementation of the Terrorism Risk Insurance Actby the Treasury Department, state insurance departments, insuranceunderwriters and agents and brokers.

The Committee said it also plans to examine toxic mold andnatural disaster insurance.

On mold, the Committee said it will investigate the potentialdeleterious effect of mold on homeowners and the insurancemarketplace. The Committee says it will pay particular attention tothe Center for Disease Control's review on the effects of indoorexposure to mold which is expected this spring.

On natural disaster insurance, the Committee said it willexamine the availability and affordability of coverage and considerproposals for improving insurers' access to capital in thereinsurance, banking and securities markets to ensure adequatecapacity and solvency.

The Committee said it will pay particular attention to thepotential benefits of securitization, catastrophe reinsurance andproper long-term reserving.

Turning to homeowners insurance in general, the Committee saidit will review the availability crisis in several states, includinga look at how state price controls diminish long-term supply andoptions for coverage.

The Committee said it will also examine insurance companyunderwriting criteria, including how insurance claims and inquiriesare scored and how financial characteristics unrelated to aconsumers' insurance history are factored into the sale ofhomeowners' policies.

Moreover, the Committee said, in its review of the Fair CreditReporting Act, it will examine the increasing use of credit scoresto determine consumers' eligibility for auto insurancepolicies.