Senate Gets NAMIC Letter On State Insurance Regulation

WASHINGTON--Charles Chamness, president and chief executive officer of the National Association of Mutual Insurance Companies, has written the Senate urging it to reform rather than replace the state-based insurance regulatory system.

His letter was written in anticipation that Congress will debate legislation dealing with insurance regulatory issues when it returns to work from its summer recess Sept. 8.

He was responding to the comments July 29 by Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee, at a hearing on insurance issues.

Sen. Dodd said during the session that he would poll his committee over the recess to determine what insurance regulatory bills the committee would be interested in passing this year.

In the letter, Mr. Chamness voiced support for creating an Office of Insurance Information within the Treasury Department.

Such an office would represent the limited form of federal oversight NAMIC finds appropriate, Mr. Chamness said. The bill is H.R. 5840, the Insurance Information Act.

"NAMIC believes an OII could play an important role in the effort to streamline and modernize the state-based insurance regulatory system, while recognizing and respecting the rightful and necessary role of state-based regulation," Mr. Chamness said.

Mr. Chamness also said in his letter that NAMIC would support passage of two other bills, one streamlining oversight of nonadmitted insurance and reinsurance carriers, and another providing a mechanism for creating uniformity in licensing of insurance producers.

The bill reforming regulation of the surplus lines industry is H.R. 1065, the Nonadmitted and Reinsurance Reform Act. The bill recreating the National Association of Registered Agents and Brokers is H.R. 5611.

But he said NAMIC does not support legislation that would allow risk retention groups, currently limited to liability coverage, to provide property insurance. That bill is H.R. 5792.

The House is expected to pass legislation creating an OII and reestablishing NARAB soon after it returns from recess.

Legislation streamlining the surplus lines and reinsurance industry passed the House last year. The legislation he asked for quick action on is the Nonadmitted and Reinsurance Act of 2007.

Similar legislation was introduced in the Senate last year as S. 929, by Florida senators Mel Martinez and Bill Nelson.

S. 929 is co-sponsored by Sen. Mike Crapo, R-Idaho, a member of the Banking Committee, and Sen. David Vitter, R-La.

In his letter this week, Mr. Chamness said that "NAMIC believes that significant regulatory reforms are necessary to meet the needs of a dynamic, competitive, modern insurance marketplace."

He added, "The package of targeted reforms outlined above is an immediate, effective and appropriate means of advancing insurance regulatory reform."