Senate Banking Leadership Optimistic On Reform

NU Online News Service, Dec. 28, 12:25 p.m. EST

WASHINGTON–Insurance industry officials say they are encouraged by the announcement of the leadership of the Senate Banking Committee that work is progressing on bipartisan financial services reform legislation, and the committee hopes to "resolve the remaining issues before we reconvene in January."

Sen. Chris Dodd, D-Conn., chairman of the committee, and Sen. Richard Shelby, R-Ala., ranking member, issued the statement on Christmas Eve, as the Senate completed its vote on healthcare and left for the holidays.

In their statement, the senators said that, "For the last few weeks we, and other members of the Banking Committee, have been engaged in serious negotiations, with the goal of producing a bill that strengthens our regulatory structure and makes our economy more secure."

They added that the talks have been productive with members "demonstrating a desire to get this done and get this done right."

The bi-partisan group shares many of the same goals, the senators said, among which are:

o Eliminating institutions that are 'Too Big to Fail.'"

o Protecting American taxpayers "from future bailouts by enhancing our resolution regime."

o Strengthening consumer protections.

o Streamlining and modernizing the financial regulatory structure "while preserving the dual-banking system."

o Keeping the Federal Reserve's focus on its core responsibility–conducting monetary policy.

o Modernize regulation and oversight of the derivatives market.

Blaine Rethmeier, a spokesman for the American Insurance Association, interpreted the announcement as good news, adding that it appears both sides are serious about financial regulatory reform.

"It sounds like their bipartisan approach has been productive and we share their view that our regulatory structure needs to be modernized and streamlined while making our economy more secure," he said.

He went on to say that the association would continue to stress that any reforms need to take into account the level of risk the industry poses to the broader financial system and measures already in place to regulate the business and resolve insolvent insurers.

Joel Wood, senior vice president of government relations for the Council of Insurance Agents & Brokers, said the association "looks forward" to the coming Senate debate on regulatory reform.

The Senate Banking Committee leadership's statement leaves him "no idea how the showdown over the Consumer Financial Protect Agency and systemic risk will ultimately play out, and I'm grateful that for the most part, our brokerage members have been able to steer clear of those issues."

Mr. Wood added that, "We'll keep our head down, encourage Sen. Dodd and Sen. Shelby to be aggressive on insurance reform, and do our best to make sure that the surplus lines provisions are finally enacted into law."

The National Association of Professional Surplus Lines Offices agreed the statement is a positive step for its top legislation priority, surplus lines reform.

NAPSLO Executive Director Richard Bouhan said that financial services reform will be the next challenge for Congress after it completes health care reform. He said he expects the Senate to approve the surplus lines language already approved by the House of Representatives, adding "that the opportunity to get surplus lines reform language signed into law is finally here."

Charles Symington, senior vice president of government affairs for the Independent Insurance Agents & Brokers of America, said it is "of paramount importance" that the Senate recognize that the insurance market has been well-regulated at the state level, adding that the association is "working diligently" to avoid "needless, additional oversight."