Oxley To Senate: Let's Talk Backstop

By Steven Brostoff, Washington Editor

NU Online News Service, April 11, 10:22 a.m. EST, Washington?The U.S. House of Representatives is ready to engage the Senate in the effort to craft legislation creating a federal backstop for insurance losses caused by terrorism, the chairman of the House Financial Services Committee said.

"We are not hung up on details," Rep. Mike Oxley, R-Ohio, said at the annual legislative conference of the Alexandria, Va.-based Independent Insurance Agents of America.

"The bottom line is the Senate needs to stop protecting trial lawyers and start protecting American jobs," he said.

Rep. Oxley noted that the House passed its own legislation in November and has been ready to go to conference with the Senate since then.

It is important for the Senate to act, he said. The nation must be prepared for another attack, Rep. Oxley said, adding that this is not just an insurance issue, it is an economic issue.

Turning to the USA Patriot Act, legislation enacted in the aftermath of Sept. 11 and which applies anti-money laundering requirements to insurance agents, Rep. Oxley said he is concerned about the impact of an upcoming Treasury Department regulation on small insurance agencies.

All the evidence suggests that small insurance agencies do not face much risk of being used to launder money, he said.

Rep. Oxley said he will be meeting with Treasury Secretary Paul O'Neill to try to make sure that implementation of the USA Patriot Act will not create an excessive burden on insurance agencies.

On the issue of federal preemption of state laws regulating bank insurance sales, Rep. Oxley said he plans to talk to the Treasury Department to change the approach of the Office of the Comptroller of the Currency.

The OCC has determined that bank insurance laws in West Virginia and Massachusetts "prevent or significantly interfere" with federally-granted bank insurance powers and thus should be preempted.

IIAA, the National Association of Professional Insurance Agents, Alexandria, Va., and the National Association of Independent Insurers, Des Plaines, Ill., have all brought legal action against OCC contesting the West Virginia ruling.

If necessary, Rep. Oxley said, his committee will conduct an oversight hearing on the OCC's activities.

Preemption of state laws, he said, is not what the drafters of the Gramm-Leach-Bliley Act intended.

Finally, Rep. Oxley said his committee will continue its examination of efforts to streamline state insurance regulation While states have made a lot of progress, he said, the goal of uniformity remains elusive.

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Oxley To Senate: Let's Talk Backstop

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