Final legislative language recognizes strong state insurance regulation.
WASHINGTON, D.C., June 30, 2010 – The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) today commented on the U.S. House of Representative’s passage of the “Dodd-Frank Wall Street Reform and Consumer Protection Act” conference report to reform financial services regulation. The legislation was drafted in response to the recent financial crisis.
The Big “I” is pleased that the conference committee made several improvements to the Federal Insurance Office (FIO) during the conference committee meetings. The most significant changes to the FIO will go a long way to prevent unnecessary and arbitrary preemption of state laws—laws that have protected consumers for years and were particularly critical during the financial crisis. These changes include allowing for a de novo review of FIO preemption decisions, thereby creating a more level playing field for state regulators to challenge a decision that adversely impacts state laws and insurance consumers.
“The Big ‘I’ believes Congress made the correct decision in the final financial services regulatory reform legislation by leaving day-to-day regulation of the insurance market at the state level,” said Robert Rusbuldt, Big “I” president & CEO. “Property/casualty insurers were not to blame for the financial crisis and pose no systemic risk to the overall economy. While the current system no doubt needs more uniformity and modernization, state regulation of insurance has a proven track record of ensuring insurer solvency and consumer protection, and it’s encouraging that the House and Senate have both recognized the strength of the state regulatory system.”
The bill also included legislation, strongly endorsed by the Big “I,” to modernize the state-based regulatory system. This legislation, the “Nonadmitted and Reinsurance Reform Act (NRRA),” would streamline the regulation of surplus lines and reinsurance products by making the insured’s home state the sole regulator in surplus lines transactions. While a strong proponent of state regulation of insurance, the Big “I” supports ways to improve the system through targeted reforms such as this NRRA provision.
“While the Big ‘I’ has not endorsed the legislation, we do appreciate the improvements made to the FIO during conference negotiations,” said Charles Symington, Big “I” senior vice president of government affairs. “We also commend Congress for including the ‘Nonadmitted and Reinsurance Reform Act’ in the overall package. This is a perfect example of the proper way to modernize insurance regulation: targeted federal legislation to improve the state system without creating a federal regulator.”
The Senate is expected to vote on the conference report after the July 4 recess.
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