Property-casualty insurance company and producer groups are sharply at odds over legislation introduced last week in the U.S. Senate that would create a federal licensing process enabling insurers and producers to conduct business nationwide free of state regulations.
The “National Insurance Act of 2006″ would bar states from preventing or restricting producers with a state license from selling, soliciting or negotiating insurance on behalf of national insurers.
Although state insurance laws would be preempted generally, certain statutes would still apply, including laws related to participation in an assigned risk plan, mandatory joint underwriting association or any other residual market mechanism. Compulsory state insurance laws that prescribe mandatory coverage for workers' compensation, motor vehicle insurance or both would also still apply.
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