New Insurance Chair: Federal Insurance Office a Priority, but Not Federal Charter

Just what the still-forming Federal Insurance Office becomes, and guarding against mission creep, will be a key priority for the incoming chairwoman of the congressional subcommittee charged with oversight of insurance issues. However, establishing an optional federal charter for insurance will not be high on her agenda.

“So much of insurance is state-based … we want to make sure that we have collecting and analyzing for what goes on in the states and not wanting it to be excessive oversight … so it’s kind of a balance there that we have to work out,” said Rep. Judy Biggert, R-Ill, who worked with outgoing Rep. Paul Kanjorski, D-Pa., to draft the language forming the FIO.

Biggert, who won re-election to a seventh term in November, will take charge of an expanded portfolio in the newly renamed Subcommittee on Insurance, Housing and Community Opportunity under the House Financial Services Committee. The full subcommittee membership is yet to be finalized, but Biggert expects to see a number of new faces, given the arrival of one of the largest freshman classes in congressional history.

“We’ve had not just people who are in state legislatures, but who have been in the business world, who have been in these markets,” she said.

Insurance issues that fell under the Financial Services Committee were previously steered to the Kanjorski-led Capital Markets, Insurance and Government-Sponsored Enterprises Subcommittee. However, Kanjorski, who many insurer representatives credited for his industry knowledge, lost his re-election bid. Rep. Scott Garrett, R-N.J. will now lead the Capital Markets and Government-Sponsored Enterprises Subcommittee, which will work on reforming Fannie Mae and Freddie Mac and enforcing an audit of the Federal Reserve (BestWire, Dec. 10, 2010).

The subcommittee will have an agenda that includes the Dodd-Frank financial reform act, renewal of the National Flood Insurance Program and potential consideration of an optional federal charter. But the focus will be on oversight of and amendments to Dodd-Frank’s insurance provisions, particularly the FIO. While insurance matters are expected to be a small part of the Financial Stability Oversight Council, and no part of the Consumer Financial Protection Bureau, Biggert wants to keep both new entities focused on their missions and prevent duplicative regulation.

“We want to make sure that the regulators are doing their job, but not micromanaging them,” she said.

Consideration of an optional federal charter for insurance is a recurring issue. Past co-sponsor Ed Royce, R-Calif., said he will introduce a new bill in the next Congress (BestWire, Nov. 18, 2010). Royce lost a challenge for leadership of the full Financial Services Committee to current ranking Republican Spencer Bachus.

“I don’t know if we’ll be getting into that too much,” Biggert said. “I think we’ve got enough to do before we get to something like that.”

The complete interview with Congresswoman Biggert can be found at http://www.ambest.com/media/media.asp?RC=181550.

(By Sean P. Carr, Washington Bureau Manager: sean.carr@ambest.com)