WASHINGTON–The incoming chairman of the House Financial Services Committee said that a priority for his Committee will be renewal of the Terrorism Risk Insurance Act.

In outlining an agenda for the panel, Rep. Barney Frank, D-Mass., also said he will support an optional federal charter for life insurers, but is “skeptical” whether it would be appropriate for property-casualty insurers.

Rep. Frank would not give a timetable for action on a federal backstop for insurers' major terrorism losses, but said he wants to send a signal that would remove any fears in the marketplace that TRIA will expire as scheduled on Dec. 31, 2007.

The Committee will act to make certain that TRIA “won't lapse,” he said, and emphasized that renewing TRIA is a “very high priority.”

Mr. Frank made his comments as the opening speaker at the Consumer Federation of America's 19th annual financial services conference, being held here.

The Committee's first priority would be dealing with uniform consumer protections. Rep. Frank said the Committee would act on legislation providing “reasonable consumer protections that do not disrupt the economy.”

He said another priority for the Committee will be dealing with the catastrophic hurricane losses suffered by residents of Florida, Louisiana and Mississippi in 2005.

“Some sort of federal backup in flood insurance is also necessary,” Rep. Frank said, although the urgency for doing something about the issue has been “thrown into doubt” by two recent court decisions.

On Nov. 28 a federal court in Louisiana held many insurers liable for flood damage from levee breaks in New Orleans. “The latest court decisions will have some impact” on how promptly the committee moves to deal with the issue, the lawmaker said.

Rep. Frank also said he sees the utility for uniformity in consumer protection laws and rules–because some states have strong consumer protection statutes while others have weak ones, or none at all–but that one of the committee's priorities will be to ensure that when federal regulators pre-empt a state consumer protection law, they have the authority to impose a uniform federal one. “There are good arguments for uniformity,” he said.

For the insurance industry, that would specifically deal with how carriers react to data breaches.

He also said that there would be “no change” in the committee's jurisdiction–that is, Rep. John Dingell, D-Mich., would not get his way in having some jurisdiction over financial services.

Earlier, however, he disclosed that he has asked incoming Speaker Nancy Pelosi, D-Calif., if a “task force” comprised of the House committees with oversight over consumer protection laws could be established.

An example of what that group might deal with is the group of four or five bills concerning data security being processed in both the House and Senate.

Regarding the optional federal charter concept, Frank said the need for such legislation is “debatable.” Tuesday Frank Keating, American Council of Life Insurers president and chief executive officer, told an all-hands meeting of banking and insurance lobbyists that OFC “is the top priority of the ACLI for the third year in a row.”

Mr. Frank said life insurance “has increasingly become a financial product, with no geographical issues.” He described property-casualty insurance as a different matter, saying he is “very skeptical” about an OFC for p-c.

“I don't know any legislator who looks fondly on dealing with auto insurance,” he said, calling p-c issues “more regional” in nature.

Under questioning later, however, he declined to differentiate between commercial and personal lines insurance, saying he has not dealt with the issues “in detail.”

Asked to respond to speculation within the insurance industry that the price for an OFC would be compliance with the Community Reinvestment Act, which gives bank regulators some oversight over the activities of banks, Mr. Frank dismissed it. “There are no deals in the works,” he said.

“That all lies ahead,” he explained, at the same time declining to give a timeline on either hearings or action on issues relating to insurance regulation.

Special Reports /

Chairman-Elect Frank Says TRIA Renewal A Priority

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