Capitol Hill To Work On Insurance Issues In July

Next month will see a spate of congressional focus on insurance regulatory issues as both houses plan some action before departing on an extended summer vacation and returning for a brief fall session before adjourning to campaign.

Meanwhile, industry officials are voicing hope privately that Congress, sometime in July, will complete work on legislation reauthorizing and reforming the National Flood Insurance Program.

That is because the current authorization for the program runs out Sept. 30, at the end of the current government fiscal year, and members of Congress hope to keep the fall session as brief as possible because it is a presidential election year.

Congress departed today for a July 4th recess and plans to return July 7. It will recess for the summer in late July.

Insurance industry representatives say that because of the backlog of work it is unlikely a formal conference to deal with the flood bill will take place, but there will be "informal back and forth" between the House and Senate over their rival flood bills.

The key issue is that the Senate has made clear it will not accept a provision in the House bill adding wind coverage to the flood program.

Rep. Gene Taylor, D-Miss., the primary sponsor of legislation adding wind to the program, addressed the House last night as part of his effort to win support for adding wind to the program. The House bill is H.R. 3121.

However, the Senate, when it took up the issue May 13, voted overwhelmingly against an amendment adding wind to the program. The vote was 73-19 against the amendment. The Senate bill is S. 2284.

"There will be some quiet back and forth between the Senate and House staffers, with adding wind off the table," predicted one lobbyist who asked not to be named. "They'll split some differences."

The first order of insurance regulatory business will be in the House Financial Services Committee, which plans to take up legislation creating an insurance information office in the Treasury Department soon after it returns, according to several lobbyists and congressional staffers.

These people say that Rep. Paul Kanjorski, D-Pa., is reaching out to all interested parties in an effort to develop a compromise that all insurance interests can support, according to several lobbyists.

The Insurance Information Act of 2008 (H.R. 5840) was introduced April 14 by Rep. Kanjorski, chairman of the Capital Markets Subcommittee of the FSC.

He has already drafted a substitute that the National Association of Insurance Commissioners has said it can support, and Rep. Kanjorski is also reaching out to other interested parties that have voiced concerns in an effort to determine what changes he can make so the bill is acceptable to them, according to the sources.

Meanwhile, in the Senate, preparations are underway to hold an umbrella hearing on all insurance regulatory issues in late July in the Senate Banking Committee.

Among the issues likely to be reviewed are legislation creating an optional federal charter, the House bill creating an office of insurance information within Treasury, and legislation reforming the nonadmitted and reinsurance markets.

Legislation creating an optional federal charter, S. 40, was introduced in 2007 by Sen. Tim Johnson, D-S.D., and Sen. John Sununu, R-N.H.

The Nonadmitted and Reinsurance Reform Act, H.R. 1065, passed the House unanimously last June. The NAIC is said to be nearing support for provisions reforming the surplus lines market, but still maintains concerns about the reinsurance provisions, according to industry lobbyists.

A similar bill was introduced last year by Sen. Bill Nelson, D-Fla., and Sen. Mel Martinez, R-Fla., but no hearing has as yet been held on it.