House Action Delayed On Insurance Bills

WASHINGTON–House floor action on two insurance bills will be delayed until Congress returns to work in September after a new California congresswoman voiced concern that one of the bills would inadvertently preempt California law.

Industry lobbyists, who declined to be named, said floor action on the Insurance Information Act of 2008, or H.R. 5840, and the National Association of Registered Agents and Brokers Reform Act, also known as H.R. 5611, will be delayed until Congress returns from its summer recess Sept. 8.

The bills were scheduled to be acted on under the suspension calendar, according to the lobbyists.

But action was delayed because new Rep. Jackie Speier, D-Calif., went to House Speaker Nancy Pelosi, D-Calif., who represents a neighboring district, to object, the lobbyists said.

Her concerns were first voiced during the markup on the bills in the Capital Markets Subcommittee of the House Financial Services July 9, but no action was taken.

Rep. Speier, a longtime member of the California State Senate, was recently elected to replace Rep. Tom Lantos, D, who died in February.

Her concern was that the bill creating the Office of Insurance Information would inadvertently preempt consumer protections instituted by Proposition 103, a 1988 ballot initiative dealing with California insurance rates.

On the property-casualty side it rolled back auto rates, and on the life side it repealed the state's anti-rebating law.

H.R. 5840 would create an Office of Insurance Regulation within the Treasury Department and H.R. 5611 would create a streamlined system for nonresident licensing of insurance agents.

Ms. Speier could hold up action on the bill because it requires a two-thirds vote to pass under the expedited procedure being used to get as much work done as possible before the House leaves for a month-long recess this weekend.

Action on the bill is expected early in September. It has strong support in the House, within the insurance industry and within the Bush administration.

But in a recent letter to members of Congress, the National Association of Professional Insurance Agents said the bill has the effect of “enabling federal insurance regulation.”

That was denied by its primary sponsor, Rep. Paul Kanjorski, D-Pa.

In a recent letter to colleagues, Rep. Kanjorski, the chairman of the Capital Markets Subcommittee of the FSC, said it is needed to give the federal government “a credible source of information and expertise on insurance matters.”