Ohio Panel Says Rep. Oxleys

The Ohio House Insurance Committee voted 14-1 to ask the legislature to pass the same resolution and send it to the leadership of both parties of Congress.

Rep. Mike Oxley, R-Ohio, chair of the Financial Services panel, did not respond to several requests for comment. However, a veteran industry lobbyist–Joel Wood of the Council of Insurance Agents and Brokers–called the resolution "misguided," and said it was unlikely to have any impact on the committee's decision about the State Modernization and Regulatory Transparency Act (SMART).

The Independent Insurance Agents & Brokers of America also voiced disappointment. "Unfortunately, some at the state level are getting hung up on minutiae and do not see the big picture," said Charles Symington, senior vice president of government affairs at IIABA.

"Chairman Oxley is one of the strongest supporters of state insurance regulation," he added. "As a former member of the National Conference of Insurance Legislators, he understands the strengths of the state system–but he also understands the weaknesses. That is why he wants to modernize the system to bring it into the 21st century and forestall creation of a federal regulator."

Mr. Symington said IIABA "strongly supports his efforts and looks forward to working with him and Rep. Richard Baker, R-La., chairman of the panel's Capital Markets Subcommittee, as they move SMART forward." Reps. Oxley and Baker are on target to release a new draft of the bill this summer, industry lobbyists say.

It is unclear what the full Ohio legislature will do with the draft resolution, but it might get Rep. Oxley's attention, since even a representative from his own backyard–Derrick Seaver, representing Minter in Rep. Oxley's 4th District–is a sponsor of the resolution.

The committee is working with industry trade groups and the National Association of Insurance Commissioners in hopes of creating a consensus on the bill.

The Ohio resolution contends that state legislatures are "more responsive [than federal officials] to the needs of their constituents and more knowledgeable regarding the market conditions in their own states and the necessary insurance products and regulations to meet those market conditions."

The resolution contends that SMART would "undermine state sovereignty, threaten the power of state legislatures, governors, insurance commissioners and attorneys general to oversee, regulate and investigate the insurance industry." It also said SMART would "limit the states' ability to protect the interests of their constituents."

Defending Reps. Oxley and Baker's efforts, Mr. Wood said the fact that "state legislators want to preserve turf should not come as a surprise to anybody," adding that the Ohio panel is "very, very misguided if they think the proposed SMART Act is destructive to state insurance regulation–precisely the opposite is true.

"The paradox is that there are many players who think the SMART Act doesn't go nearly far enough–that Congress should enact federal regulation to supplant state regulation," Mr. Wood said. "In the absence of common sense, middle-of-the-road reforms like SMART, arguably the closer we get to a full federalization."

Officials from his own state blasted Rep. Mike Oxley's efforts to consider federal standards for insurance regulation.