Sen. Schumer Plugs U.S. Chartering
By Steven Brostoff, Washington Editor
NU Online News Service, March 13, 4:06 p.m. EST, Washington?Sen. Charles Schumer, D-N.Y., a sponsor of legislation for optional federal chartering of insurance companies, told an industry meeting here his measure is the "unfinished business" of Gramm-Leach-Bliley Act financial reform.
The insurance industry is moving quickly and is more global, he said. The new product approval process, which requires insurance companies to jump through 50 regulatory hoops, just doesn't make sense, he said.
Sen. Schumer spoke before the annual joint legislative conference sponsored by the Council of Insurance Agents and Brokers, the American Insurance Association and the Reinsurance Association of America, all of Washington.
Especially in light of the debate over terrorism reinsurance, he said, it is clear that the federal government needs to expand its understanding of insurance.
There is a need, Sen. Schumer said, for a federal regulatory structure that complements but does not supplant state regulation.
He said that this is not something that will happen immediately. It will take several Congresses to enact optional federal chartering, Sen. Schumer said, but it is important to jumpstart the debate now.
Indeed, he said, he hopes the Senate Banking Committee will hold hearings on optional federal chartering this summer. He also said that Sen. Chuck Hagel, R-Neb., is considering becoming a co-sponsor of his legislation, which would give it bipartisan support.
Sen. Schumer urged those who support optional federal chartering to get behind his effort. If they do, he said, enacting optional federal chartering would not be a 25-year effort as was GLB.
Also speaking at the conference, Rep. Henry Hyde, R-Ill., said he hopes Congress can pass an asbestos liability reform bill.
Many members of Congress are increasingly concerned about asbestos liability, he said, which has forced some 20 companies to declare bankruptcy.
The courts, Rep. Hyde said, can't handle the issue and the United States Supreme Court has specifically asked Congress to find a solution.
"I hope we can work this out," he said.
Turning to the issue of bankruptcy reform, which has been tied up in conference for several months, Rep. Hyde said that the House last week delivered its "final offer" to the Senate on a compromise.
If the Senate accepts the offer, he said, there could be a bill.
The bankruptcy reform issue involves one issue of interest to p-c insurers. The House version of the legislation contains a provision that would allow U.S.-based investors of Lloyd's of London to challenge certain disputed claims in U.S. courts.
The claims at issue arose between Jan. 1, 1975, and Dec. 31, 1993, and involve allegations that Lloyd's defrauded the U.S.-based investors.
The legislation does not appear in the Senate's version of the bill.
If the House and Senate do reach a compromise, the final bill, whether or not it contains the Lloyd's language, will face a straight up-or-down vote and will not be subject to amendment.
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