Legislation that would create an Office of Insurance Information at the Treasury Department has been pulled off the floor in the U.S. House of Representatives, although the House did pass a measure to set up a national agency licensing system.
House Speaker Nancy Pelosi, D-Calif., decided on Wednesday night to yank H.R. 5840 off the House "suspension calendar"–which is used to consider what appear to be uncontroversial bills–after Rep. Jackie Speier, D-Calif., a lawmaker from a neighboring district who is serving her first term in Congress, raised questions about how the measure would affect California insurance rate regulation.
Members of the House did pass H.R. 5611, a bill that would change nonresident agent licensing by creating a National Association of Registered Agents and Brokers. H.R. 5611 likely will go to the Senate Banking Committee for further action.
At present, neither House bill has a companion measure in the Senate. Congress plans to adjourn on Sept. 26, leaving very little time to pass insurance-related bills along for President George W. Bush's consideration.
Doubts are even being expressed on whether there will be enough time to iron out the differences between the House and Senate National Flood Insurance Program reauthorization bills, with the House seeking to add wind coverage. The program expires on Sept. 30.
Earlier on Wednesday, the American Council of Life Insurers wrote to Treasury Secretary Henry Paulson to suggest that, in the wake of the government's efforts to help American International Group with a massive bridge loan, the Bush administration should use the authority it already has to establish an Office of Insurance Information unilaterally.
Joel Wood, senior vice president of federal affairs at the Council of Insurance Agents and Brokers, cited the AIG rescue while reacting to the move to pull H.R. 5840 from the suspension calendar.
"In the aftermath of the federal government's emergency $85 billion loan to AIG, it is disappointing and highly surprising that a misguided concern has been raised about this legislation by a freshman member," Mr. Wood said.
"Other sources are dumbfounded that a member who has joined the committee hardly six months ago has taken on her chairman, [Rep. Barney Frank, D-Mass., chair of the House Financial Services Committee] and used her clout with the speaker to put on the brakes in the middle of the AIG crisis," Mr. Wood added.
"We are still confident that this bill will pass the House, but every concern about unjustifiable preemption of state law is specious," according to Mr. Wood. "If anything, most people within the industry would argue that it doesn't empower the federal government enough to fulfill its responsibilities to the national economy."
Consumer Watchdog, a Santa Monica, Calif.-based consumer group that helped pass California's Proposition 103 property-casualty insurance rate control proposition, cited the AIG arrangement when it wrote to Congress to oppose H.R. 5840.
In the wake of the government's decision to lend $85 billion to AIG for liquidity purposes, "Congress needs to rethink a proposal that would give the Treasury Department the authority to negotiate international insurance agreements and then preempt unspecified state laws that conflict with those agreements," Consumer Watchdog wrote in its letter.
Meanwhile, passage of the NARAB drew praise from the Independent Insurance Agents and Brokers of America. The bill "will make independent agents more efficient by eliminating costly and redundant paperwork for multistate agent licenses," said IIABA's president and chief executive, Robert Rusbuldt. "By streamlining the licensing process, agents will have more time to focus on what's most important–serving consumers."
The bipartisan NARAB Reform Act would provide for nonresident insurance producer licensing while preserving the rights of states to supervise and discipline intermediaries operating in its jurisdiction.
This bill would immediately establish NARAB as a private, nonprofit entity managed by a board composed of insurance regulators and marketplace representatives, the IIABA noted.
The NARAB board created by the legislation would not be part of, or report to, any federal agency and would not have any federal regulatory power, IIABA added.
"We believe that this type of targeted federal legislation makes the appropriate reforms to the marketplace and improves insurance regulation without having to take the unprecedented path of creating a new federal regulator," said IIABA's senior vice president of government affairs, Charles E. Symington Jr.
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