U.S. Office Of Insurance Information Bill Submitted

NU Online News Service, MAY 26, 3:34 p.m. EDT

WASHINGTON–Legislation that would create an Office of Insurance Information within the Treasury Department has been reintroduced with little fanfare by Rep. Paul Kanjorski, D-Pa.

Two property-casualty insurance trade groups–the National Association of Mutual Insurance Companies and the American Insurance Association–today voiced support for the legislation, which Rep. Kanjorski submitted on Friday.

The bill, H.R. 2609, is the same bill Rep. Kanjorski introduced last year but which died on the House floor in mid-September on orders from House Speaker Nancy Pelosi, D-Calif.

Six members of the House Financial Services Committee, including Rep. Judy Biggert, R-Ill., ranking member of the House Financial Services Subcommittee on Oversight and Investigations, joined as original co-sponsors of the bill.

Other co-sponsors include Rep. Melissa Bean, D-Ill.; Rep. Michael Capuano, D-Mass.; Rep. Dennis, Moore, D-Kan.; Rep. David Scott, D-Ga.; and Rep. Ed Royce, R-Calif.

It is being introduced as the Obama administration prepares to propose changes in the overall financial regulatory system.

In testimony before a House Appropriations Committee subcommittee last Thursday, Treasury Secretary Timothy Geithner said a broad set of regulatory change proposals will be unveiled soon, and a new entity to protect consumers of financial products could be part of the package.

A spokesman for the Treasury Department added that the administration has not yet determined whether insurance products would be among the products that would come under the umbrella of the new consumer protection entity.

Leigh Ann Pusey, president of the American Insurance Association, said that setting up a federal Office of Insurance Information "could be a tremendously valuable tool in helping collect and analyze appropriate data on insurance-related issues at the national level."

She also noted that "to the extent the establishment of such an office helps create federal insurance expertise and facilitates a uniform national policy on domestic and international insurance issues, it is sorely needed."

Jimi Grande, National Association of Mutual Insurance Companies vice president, federal and political affairs, said that NAMIC is "pleased" to see the bill introduced.

"A properly constructed OII will help bring a more focused understanding of insurance matters to federal policymakers and would not preempt any of the sound solvency and consumer protections that the national system of state-based insurance regulation provides.

Eli Lehrer, a senior fellow at the Competitive Enterprise Institute, called the OII bill "simply a common-sense measure." He said the federal government, "if nothing else, needs a repository of expertise about insurance. That's been lacking to date."

H.R. 2609 is based on a recommendation contained in a Blueprint on Financial Modernization prepared by the Treasury Department under the guidance of then Treasury Secretary Henry Paulson. It was released in March 2008.

"While most other pieces of the national economy have some sort of knowledge center within the federal government, insurance currently stands without a central office," Rep. Kanjorski said in a statement.

As proposed in the legislation, an OII would collect and analyze data on insurance; advise the Secretary of the Treasury on major domestic and international policy issues; report to Congress every two years; establish federal policy on international insurance matters; and ensure that state insurance laws remain consistent with federal policy in coordinating international trade agreements.

The bill would also establish an advisory group to help inform and advise the head of the insurance information office. Those represented in this group would include state regulators, consumer groups and other parties in the insurance industry.

Ben McKay, Property Casualty Insurers Association of America vice president, federal government affairs, said the PCI is "pleased to see the helpful clarifications of the preemption provisions in the new OII legislation. Though the bill was just introduced last week, however, we are still reviewing it, and look forward to working with Chairman Kanjorski after the Memorial Day recess."

Charles E. Symington, Jr., Independent Insurance Agents & Brokers of America senior vice president, government affairs, said IIABA "believes that the Insurance Information Act is a good example of targeted legislative reform – it is an efficient and pragmatic measure that fills the void of insurance expertise at the federal level and helps solve the problems faced by insurance industry participants in the global economy without the need to create a federal insurance regulator."