U.S. House Capital Markets Subcommittee Considers Insurance Bills

The United States House of Representatives Financial Services Capital Markets, Insurance, and Government Sponsored Enterprises Subcommittee met on Wednesday, July 9, 2008 and considered the following three insurance-related bills, in addition to a bill draft amending Federal securities laws:

 

H.R. 5840, also known as the “Insurance Information Act of 2008” was ordered reported to the Full Committee, with a favorable recommendation, as amended, by voice vote.

• An Amendment in the nature of a substitute by Committee Chairman Paul Kanjorski, no. 1, was AGREED TO by voice vote.
• An Amendment by Congressman Speier, no. 1a, was OFFERED AND WITHDRAWN.

H.R. 5611, also known as the “National Association of Registered Agents and Brokers Reform Act of 2008” was ordered reported to the Full Committee, with a favorable recommendation, as amended, by voice vote.

• An Amendment in the nature of a substitute by Congressman Scott, no. 1, was AGREED TO by voice vote.

H.R. 5792, also known as the “Increasing Insurance Coverage Options for Consumers Act of 2008” was ordered reported to the Full Committee, with a favorable recommendation, as amended, by voice vote.

• An Amendment by Congressman Moore (KS), no. 1, was AGREED TO by voice vote.

Committee Print, Securities Act of 2008, was ordered reported to the Full Committee, with a favorable recommendation by voice vote.

• An Amendment by Congressman Capuano, no. 1, was OFFERED AND WITHDRAWN.

 

Related Documents: Opening Statement of Congressman Kanjorski regarding the introduction of the insurance regulatory reform bills above and the Securities Act of 2008.

 

The National Association of Insurance Commissioners (“NAIC”) issued the following press release subsequent to yesterday’s Subcommittee markup hearing that included letters to Subcommittee leadership on each of the three insurance bills that were heard (accessible via hyperlinks below):

 

NAIC OFFERS VIEWS ON THREE INSURANCE BILLS AT SUBCOMMITTEE MARK-UP

KANSAS CITY, Mo. (July 9, 2008) — National Association of Insurance Commissioners (NAIC) President and Kansas Insurance Commissioner Sandy Praeger sent letters to Reps. Paul Kanjorski (D-Pa.) and Deborah Pryce (R-Ohio), the chair and ranking member of the U.S. House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, regarding three insurance bills marked up by the Subcommittee today:

• H.R. 5840, Insurance Information Act of 2008;
• H.R. 5611, National Association of Registered Agents and Brokers (NARAB) Reform Act of 2008; and
• H.R. 5792, the Increasing Insurance Coverage Options for Consumers Act of 2008.

H.R. 5840 would establish an Office of Insurance Information within the U.S. Department of the Treasury. The NAIC offered its conditional support of the measure, provided that the definition and scope of agreements be tightened to enhance the ability of insurers and reinsurers domiciled in any of the United States or territories to expand access to foreign markets, while maintaining consumer protections domestically.

“Some members of Congress and industry lobbyists have made claims that this bill is the first step to an “optional federal charter” for insurance,” Praeger said. “Every insurance commissioner strongly believes that an OFC is the worst possible public policy choice for insurance. An OFC would decimate consumer protections via arbitrage, would damage the world’s most competitive insurance market and would result in a massive expansion of the federal government. The NAIC unequivocally opposes any attempts to use this bill as a vehicle for such a misguided policy.”

H.R. 5611 would streamline the process for nonresident licensing of insurance producers.

“The NAIC recognizes that streamlined nonresident producer licensing is an important goal, and we believe that the targeted approach taken by the manager’s amendment to H.R. 5611 achieves that objective without compromising State consumer protections,” Praeger said. “Although the NAIC is supporting the latest version of the legislation, this is a unique case and should not be misinterpreted to support any further preemption of state laws. Insurance regulatory reform should always begin and end with the states.”

H.R. 5792 would expand coverage of risk retention groups into commercial property and include corporate governance standards. The NAIC did not take a formal position on this bill.

 

The American Association of Managing General Agents (“AAMGA”) has provided access to information and testimony given during the hearing:

AAMGA Governmental Affairs Update:
Office of Insurance Information

During a hearing held yesterday, July 9th on Capitol Hill in respect of the Bill to create an Office of Insurance Information (HR 5840), Congressman Paul Kanjorski (D. Pa.), offered a manager’s amendment during the mark-up on the legislation. Mr. Kanjorski stated: “The creation of an Office of Insurance Information would provide an effective way to help Congress and the federal government make more informed decisions regarding national and international insurance policy.  Congress continues to vote regularly on insurance matters.  In order to create the most effective and sensible legislation, we, as lawmakers, must educate ourselves on insurance policy and build a knowledge base in the federal government on these issues.  An Office of Insurance Information would help initiate such sought after results.”
       
A copy of the Amendment, as well as a section-by-section summary of the amendment can be viewed by clicking on the foregoing hyperlinks. In addition, copies of the testimony provided on the legislation can be viewed by clicking on the name hyperlinks links below:

* Mr. Jeremiah O. Norton, Deputy Assistant Secretary
 U.S. Department of the Treasury
 
* The Honorable Michael T. McRaith, Illinois Division of Insurance on behalf of the National Association of Insurance Commissioners

* The Honorable Brian P. Kennedy, Rhode Island House of Representatives; President, National Conference of Insurance Legislators
 
* Mr. Neal S. Wolin, President and Chief Operating Officer, Property and Casualty Operations, The Hartford Financial Services Group on behalf of the American Insurance Association
 
* Mr. Stephen E. Rahn, Vice President and Associate General Counsel, Lincoln Financial Group on behalf of the American Council of Life Insurers
 
* Ms. Tracey Laws, Senior Vice President and General Counsel, Reinsurance Association of America
 laws061008.pdf
 
* Dr. David A. Sampson, President and Chief Executive Officer, Property Casualty Insurers Association of America

Available Member Statements:

* Congresswoman Ginny Brown-Waite
* Chairman Kanjorski 
* Congressman Hinojosa
* Congressman Carson

Related Documents:

* National Association of Insurance
 Commissioners

 
 

Should you have any questions or comments, please do not hesitate to contact Colodny Fass.

 

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