Two more insurance industry groups came out in opposition to a Senate bill that would create a U.S. Commerce Department insurance regulatory commission.
The National Association of Professional Insurance Agents (PIA) will actively oppose legislation introduced by Sen. Ernest “Fritz” Hollings (D-S.C.) that would federalize the regulation of insurance, the group said in a statement.
Hollings’ bill S. 1373, “The Insurance Consumer Protection Act of 2003,” would create in the Commerce Department a five-member Federal Insurance Commission that would establish standards, regulate rates and policies, investigate market conduct and oversee solvency.
Anti-trust exemption under the McCarran-Ferguson Act would be repealed under the bill, and the new regulatory system would not be optional. The new Federal Insurance Commission would regulate all lines of insurance except carriers doing business solely in the state where they are domiciled, workers’ comp and state residual workers’ comp pools.
PIA will continue to strongly oppose federalized insurance oversight proposals, regardless of whether such oversight is based on concepts of optional federal charters or a duplicative state-federal regulatory system.
The American Insurance Association, meanwhile, also released a statement opposing the Hollings bill while supporting the idea of “federal insurance regulatory alternative,” according AIA Senior Vice President of Federal Affairs Leigh Ann Pusey.
Pusey added that AIA measures all specific proposals for federal insurance oversight against a long-standing set of principles for regulatory modernization.
“In sum,” she stated, “our principles call for, and we support, creation of an optional federal chartering system that embraces competitive markets, ends government price controls and anti-competitive product regulation, thus enhancing choices for insurers and consumers. Unfortunately, Sen. Hollings’ new federal insurance regulatory proposal fails to meet these tests.”
Indeed, noted Pusey, the Hollings plan seeks to retain some of the worst “command and control” elements of state regulation, such as imposition of government price controls.
The Independent Insurance Agents and Brokers of America, the National Association of Mutual Insurance Companies and the National Association for Independent Insurers have already voiced opposition to the bill.
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