The National Association of Professional Insurance Agents is applauding a letter sent by House Financial Services Committee Chairman Michael G. Oxley (R-Ohio) to Treasury Secretary Paul O’Neill that asks O’Neill to change the way the Office of the Comptroller of the Currency (OCC) reacts to state insurance laws.
In the April 22 letter, Oxley said he wants to “unequivocally express my discontent with the Comptroller’s misinterpretation and misapplication of the Gramm-Leach-Bliley Act (GLBA) standards and our Congressional intent” when it issued a recent opinion letter encouraging preemption of several consumer protection provisions in Massachusetts law relating to bank sales of insurance. The OCC contended that the provisions interfere with such sales and therefore were preempted by GLBA.
“Chairman Oxley is correct in his conclusions about the activities of the Comptroller and PIA applauds his effort to rein in this overreaching bureaucrat” said PIA Senior Vice President of Government Affairs Patricia A. Borowski. “The OCC continues to exceed its statutory authority, misinterpret GLBA provisions and completely disregard the clear intent of Congress by attempting to unilaterally decide whether or not state insurance consumer protection laws apply to banks,” Borowski said. “In its Massachusetts and West Virginia actions, the OCC is actively attempting to usurp state regulation of insurance and impose a two-tier regulatory system—one for banks and one for all others in the insurance business.”
PIA along with co-plaintiff the Independent Insurance Agents of America (IIAA) filed a lawsuit against the OCC on Nov. 13, 2001 in the U.S. District Court for the District of Columbia seeking relief because the OCC is attempting to preempt several consumer protections in the West Virginia Insurance Sales Consumer Protection Act so the provisions would not apply to banks.
The National Association of Insurance Commissioners (NAIC), the National Association of Independent Insurers (NAII) and the Consumer Federation of America (CFA) have filed amicus briefs in support of the lawsuit.
In his letter to Treasury Secretary O’Neill, Rep. Oxley also excoriated the Comptroller for failing to make use of a dispute resolution process included in GLBA.
“The OCC’s approach in trying to overturn the Massachusetts consumer protections is particularly troublesome because Congress in the GLBA clearly stated its desire for the financial regulators to work out disagreements instead of resorting to continual litigation,” said Oxley in the letter.
Oxley asked O’Neill to ensure that Comptroller John D. Hawke give the committee prior notice before issuing any new preemption rulings, “including a brief description of his efforts to resolve the issue directly with the appropriate insurance regulators.”
Topics Massachusetts
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