NU Online News Service, May 18, 3:20 p.m. EDT, Washington–The head of the Congressional panel drafting insurance modernization legislation has written the nation's insurance regulators saying he won't confer with them on the measure until they offer more than criticism.
Rep. Richard Baker, R-La., chairman of the House Capital Markets Subcommittee, sent his comments to the National Association of Insurance Commissioners' leadership in a letter dated May 16.
Mr. Baker wrote that since the only thing the NAIC could provide the committee with was a categorical denunciation of his panel's work on the State Modernization and Regulatory Transparency Act (SMART), he didn't think it would serve any purpose for the committee leadership to meet with NAIC officials until they submitted their own reform proposal.
One congressional source called the letter "very strong." The source, who opposes the legislation in principle, nevertheless said that for the committee to put its thoughts on paper in such language is "extraordinary and reflects the extreme disappointment of the committee at the recent actions of the NAIC in opposing modernization legislation."
The source said the committee's Republican leadership wants to have draft legislation that represents a consensus of all views drafted by this summer so that it could be moved through the committee promptly.
Mr. Baker's letter would appear to be an effort to stave off criticism if the NAIC and other state officials, such as governors and legislators, complain later that they had no input in the final bill.
Rep. Baker's staff would not comment on the letter, nor would Rep. Mike Oxley, R-Ohio, chairman of the House Committee on Financial Services. An NAIC official in Kansas City said he did not know the letter had been written but would seek comment from agency officials.
Several copies of the letter were obtained late yesterday by The National Underwriter.
The letter from Rep. Baker implied that the NAIC leadership is seeking to indefinitely delay congressional action on insurance modernization legislation by not participating in the drafting of insurance regulation modernization legislation.
His letter followed a May 9 letter from Diane Koken, president of the NAIC and Pennsylvania insurance commissioner. The letter sought to delay further a meeting between Commissioner Koken and Rep. Baker on NAIC input into the efforts by the committee to draft the SMART Act.
The meeting had apparently originally been scheduled for April 28, but Ms. Koken's May 9 letter sought further delay. It followed the decision of the NAIC to send a letter dated April 22 "transmitting the NAIC's 35 pages of objections to virtually all aspects of the proposed SMART Act makes quite clear the organization's position on meaningful reform," Rep. Baker's letter said.
The single page message continues, "Please know that I consider myself fully apprised of the organization's thoughts on the matter, and I do not believe a meeting is required for me to further familiarize myself with your objections."
Rep. Baker added that he thought it "important for the NAIC to take a leadership role in the current reform effort.
"Accordingly," he went on, "I invite you to submit for my consideration a meaningful, enforceable and effective proposal for federal legislative action that will achieve the necessary reform.
"Until such time as NAIC has proffered an alternative proposal as I have requested, I do not believe it advisable to revisit your prior correspondence and request," Rep. Baker said, adding, "Please forward your recommendations at your leisure and be assured of my prompt reply."
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