Association warns pro-OFC advocates to “be careful what they wish for.”
WASHINGTON, D.C., May 21, 2010 – The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) today commented on the U.S. Senate’s passage of S. 3217, the “Restoring America’s Financial Stability Act.” The legislation is meant to address the issues that caused the recent financial crisis. The Big ”I” has long supported improving financial services regulation to prevent systemic risk, protect consumers and promote market efficiency.
“The Big ‘I’ is grateful that the Senate financial services regulatory reform legislation leaves day-to-day regulation of the insurance market at the state level,” says Robert Rusbuldt, Big “I” president & CEO. “Property/casualty insurers played no role in creating the crisis and pose no systemic risk to the overall economy. In fact, the state regulatory system, while in need of more uniformity and efficiency, has a proven track record of ensuring insurer solvency, industry competition and growth, and consumer protection, and we believe the House and Senate have both made the correct decision in recognizing the strength of the state regulatory system for insurance.”
However, the Big “I” does urge House and Senate conferees to carefully weigh the impact of some aspects of the Senate legislation on the financial services marketplace as a whole. Insurance is just one piece of the broader financial services industry, and the association feels that a healthy and vibrant financial services industry is of vital importance to the insurance market. Additionally, the Big “I” strongly encourages those who are advocating for the so-called “optional federal charter” (OFC) for insurance to take note of the dangerous direction that federal regulation and oversight can sometimes take, as evidenced by the debate on the Senate legislation.
“The debate on the Senate legislation, and specifically some of the draconian amendments offered to the bill during floor consideration, should be a dire warning to those who continue to advocate for an optional federal insurance charter,” says Charles Symington, Big “I” senior vice president of government affairs. “The advocates of OFC have long argued that federal regulation would result in a less burdensome regulatory regime for the insurance market. However, as the recent Senate debate proves, deregulation desires are unrealistic and pro-OFC advocates should be careful what they wish for.”
Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, health, employee benefit plans and retirement products. Web address: www.independentagent.com.