NU Online News Service, June 4, 3:00 p.m. EDT
Several property and casualty insurance trade groups are asking congressional conferees on financial services reform legislation to limit the scope of federal oversight on state-regulated insurers in any final bill.
Letters by the National Association of Mutual Insurance Companies and the National Association of Professional Insurance Agents were sent for Congress on its return from the Memorial Day recess.
The Senate returns from its recess June 8 and the House on June 9. The Senate appointed conferees before it left for the recess, and the House is expected to name its conferees on Tuesday.
An organization session is expected to be held midweek for the Conference Committee that will reconcile the two bills, but the first substantive session is not expected until the week of June 14.
Congress would complete work on financial services reform before the July 4th recess under an aggressive reconciliation conference schedule recently outlined by Rep. Barney Frank, D-Mass., who chairs the House Financial Services Committee.
In their letter, NAMIC officials asked Senate conferees to ensure that in any final bill, state-regulated insurers be excluded from the jurisdiction of the new Office of Financial Research that would be established within the Treasury Department.
Other requests made:
o NAMIC asked that provisions in the House on the preemption power of a separate national insurance office that would be established under the bill be included in any final bill.
The preemption provisions in the House bill dealing with the national insurance office are more limited than those proposed in the Senate bill.
o NAMIC requested that certain limitations be placed on the subpoena power of the new insurance office in any final bill. It asked that any final bill containing language establishing a resolution authority for failing financial institutions be the language contained in the Senate bill. It also asked that the assessment system be the process found in the House bill.
The Senate bill currently provides for no prefunded assessments on financial firms.
o NAMIC requested that limitations on proprietary trading for property and casualty insurers be eliminated in any final bill.
o The PIA asked that in any final bill the authority to undertake a study of how insurance should be regulated be conducted by the non-partisan Government Accountability Office, rather than the Treasury Department as proposed in both the House and Senate bills.
"The most important aspect of H.R. 4173 is that it affirms that the states will continue to regulate the business of insurance," said Leonard C. Brevik, PIA executive vice president and CEO. "While not perfect, this bill recognizes that the insurance industry did not cause the financial crisis and it appropriately directs reforms to the sectors of our economy that did cause the crisis."
He cautioned, however, that PIA having the federal insurance office "study itself and make recommendations to Congress would produce a biased result in favor of federal regulation."
Mr. Brevik added, "We remain concerned with the scope of the ONI and are also hopeful that in conference, the GAO will be substituted for the ONI as the entity conducting the study of insurance regulation,"
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.