Ex-Congressman Calls For Dual Chartering
By Mark E. Ruquet
NU Online News Service, Nov. 5, 2:00 p.m. EST, New York--Creation of a federal insurance supervisor would bring a needed federal advocate to Washington, D.C., much like the Federal Reserve Chairman is to banking, said a former Congressman who now is chief of a financial services advocacy group.[@@]
Former New York Congressman, Rick Lazio, now president and chief executive officer of the Financial Services Forum in New York City (which consists of a group of financial services chief executives promoting openness and competition in the marketplace), made these observations during the annual Professional Insurance Wholesalers Association of New York State, Inc.'s annual conference held yesterday in Brooklyn, N.Y.
Mr. Lazio said that one of the major problems for the insurance industry in Washington is that there is "no point person" who can explain the intricacies of insurance and why some measures, such as the extension of the Terrorism Risk Insurance Act, are necessary.
Not having such a point person is "a deficit for the industry," he said, adding that Federal Chartering would benefit carriers and brokers by producing "healthy" competition between regulators. He reasoned that allowing producers and carriers to choose what regulator they feel would work best for them would keep "regulatory overreaching in check."
On the issue of renewal of the Terrorism Risk Insurance Act, he was not confident the act would be renewed in a lame duck session of Congress. He noted that there has been little movement of the bill in the Senate and that it would need to be addressed in the new Congress.
Mr. Lazio urged producers to contact their Congressional representatives and impress on them the need for TRIA's renewal, since the marketplace is still unable to create enough capacity to cover the catastrophic losses the industry could suffer in the event of another catastrophic terrorist attack.
He also noted that TRIA is necessary for the continued health of the economy because without the act, the capital corporations might invest in their businesses would instead be tied up in retentions.
On the need for tort reform, he was not hopeful that it would be accomplished in the new Congress. He noted that despite gains made by Republicans in the Senate, the party still lacks the overwhelming majority it needs to move bills forward without the threat of filibustering by Democrats.
On other issues, Mr. Lazio was critical of the current political climate. He said that because of the current districting seats in the House of Representatives, 95 percent of the seats are not competitive. The result is a "polarized body" that is "skewed to the extreme." He observed that "The vibrant center for America is shrinking and has made legislators less accountable."
On the presidential election, he said the defeat of Democratic challenger, Sen. John Kerry, is a plus for business because the current tax relief will stand a better chance of becoming permanent. He added that a Democratic win in the Senate would have brought more consumer oriented legislators to some key committees.
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