WASHINGTON–The leadership of the National Conference of Insurance Legislators is asking in the strongest terms that the U.S. House of Representatives give a thumbs-down this week to legislation that would create an Office of Insurance Information within the Treasury Department.

The NCOIL leadership made its request in letters sent to the Speaker of the House and every member of the House late Friday.

The letter reiterated NCOIL's “staunch” opposition to the legislation, citing a number of reasons, including a claim that the bill “will lead to a dangerous optional federal charter for insurance regulation…that will unravel the strong consumer protections embedded in state-based insurance regulation.”

The bill–H.R. 5840, the Insurance Information Act of 2008–is scheduled for House action under expedited rules either Tuesday or Wednesday, under a preliminary calendar released by the House late Friday.

To approve H.R. 5840 now–knowing that a Senate companion bill has not even been introduced–”would only serve to embolden its supporters in the next Congress and dissuade a thorough dialogue about its ultimate impact,” the NCOIL letter said. “If passed, it would irreparably alter the face of insurance regulation.”

NCOIL is voicing its opposition, even though the modified bill that pares back substantively the authority of the office–especially its preemption authority–has won the support of the National Association of Insurance Commissioners, although the NAIC acknowledged in its letter of support that some state regulators remain opposed.

NCOIL asked for rejection of the bill even as market forces prompted AIG over the weekend to ask the Federal Reserve Board for a $40 billion bridge loan as the troubled carrier struggles to ward off a potentially devastating rating downgrade prompted by the subprime mortgage investment crisis.

Besides the concern that creation of the OII would lead to a “dangerous” OFC, the NCOIL leadership also argued that the bill has not been debated in any previous Congress and that it was reported out by the House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises after a markup in which less than 15 of the almost 50-member subcommittee voted.

“Even more troubling, the [full] House Committee on Financial Services has yet to debate H.R. 5840,” the letter said.

The letter was signed by NCOIL's president, Rep. Brian Patrick Kennedy, D-R.I.; its president-elect, Sen. James Seward, R-N.Y.; its vice president, Rep. Robert Damron, D.-Ky.; its secretary, Rep. George Keise, R.-N.D.; and its treasurer, Sen. Carroll Leavell, R.-N.M.

Special Reports /

NCOIL Pleads With House To Reject OII Bill

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