WASHINGTON (June 25, 2010) The National association of Mutual Insurance Companies (NAMIC) responded to today’s agreement by the House and Senate Conference Committee on financial regulatory reform legislation.
“This agreement, formed after two weeks of negotiation and almost two years of legislative work, appropriately focuses on the financial products that caused the economic crisis and recognizes that property/casualty insurance was not among them,” said Jimi Grande, senior vice president of federal and political affairs for NAMIC. “Throughout the legislative process, NAMIC raised concerns when we thought the legislation was unduly stepping on the toes of the state-based regulatory system, and for the most part we believe those concerns have been addressed.”
Among the major insurance-related provisions in the bill is language creating a Federal Insurance Office to provide Congress and the administration with information and expertise on insurance matters in the course of setting government policy and conducting trade negotiations. NAMIC has consistently expressed concern with regard to the creation of any federal office and has sought to ensure that the FIO would not serve in any sort of duplicative regulatory capacity.
“We wanted to make sure that the FIO was not given a fishing license through this subpoena authority, allowing it to make duplicative, expensive data calls in the hopes of finding trouble where none exists,” Grande said. “By drawing upon the House legislation for the provision creating FIO, the conferees ensured that it will serve its intended purpose as an information resource for policymakers rather than trying to do the same job being done by state regulators.”
In addition, the conference report adopts the House crafted language on the pre-emption of state law in trade issues, allowing the FIO to override the will of states as part of an international agreement in those cases where state law “directly results in less favorable treatment” for a non-U.S. insurer. “Giving the FIO broader authority to set different rules for foreign insurers, as the Senate language would have allowed, would have lead to a distortion of the marketplace and confusion for insurers and their customers. The conferees appropriately opted for the approach that maintains a level playing field for both foreign and domestic companies.”
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