WASHINGTON (June 15, 2010) – As members of the House and Senate confer to finalize legislation reforming our nation’s financial markets, the National Association of Mutual Insurance Companies (NAMIC) sought to address issues that remain a concern for the property/casualty insurance industry.
“As they have throughout the legislative process, the conferees have taken an approach that recognizes the unique nature of property/casualty insurance and respects the national state-based insurance regulatory system,” said Jimi Grande, NAMIC’s senior vice president of federal and political affairs. “NAMIC is working to ensure that some provisions in the final legislation agreed upon by the conference don’t create undue burdens on the property/casualty insurance industry, which played no role in creating the economic crisis.”
Specifically, NAMIC supports the House language that takes a more measured approach with regards to international agreements and the pre-emption of state law. While the Senate version of the bill provides authority for the office to pre-empt state laws in the interest of international agreements, the House offer instead provides for narrow pre-emptive authority only in cases where state laws are found to be directly discriminatory against foreign insurers.
“This important provision ensures that all companies, foreign and domestic, can compete on a level playing field,” Grande said. “Giving broad authority to change the rules for some companies through trade agreements would have only distorted the market and created confusion for insurers and consumers alike.”
The House offer also provides for judicial review of any federal finding that a state law is discriminatory. “By establishing a review system, the bill ensures that preemption will occur only when absolutely necessary,” said Grande. “This would serve as a vital check against an overreach by the federal office.”
However, some concerns remain. “As currently constructed, the base Senate bill would still grant the information office subpoena authority to force companies to make a data filing for information already available from other sources,” Grande said. “This duplicative authority will only add to the costs for insurers and their customers without providing any additional benefits.”
Leadership in both chambers have said they hope to complete the conference on the bill and send it to President Obama prior to the Independence Day recess.
“The impact of this bill will be felt for years to come,” Grande said. “We recognize the hard work that has been put into this legislation and urge the conferees to carefully consider the potential impact on the insurance industry and to avoid any unintended negative consequences.”
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