State insurance regulators have expressed support for recent changes to proposed legislation creating a Federal Insurance Office (FIO).
In a letter to the House Financial Services Committee, the National Association of Insurance Commissioners (NAIC) said amendments to the Federal Insurance Office Act (H.R. 2609) uphold important safeguards to ensure state regulation continues to protect insurance consumers and companies.
New Hampshire Insurance Commissioner and NAIC President Roger said the NAIC “continues to oppose a federal functional regulator for insurance or misguided attempts to further empower the FIO.”
However, Sevigny said the NAIC believes recent amendments to the bill “strike an appropriate balance among the needs of consumers, state regulators and federal negotiators by preserving important state and market regulation while allowing for agreements with equivalent regulatory systems.”
The NAIC supports changes to the bill that include:
- Close coordination between the states and the FIO on narrow international agreements
- Ensuring that international agreements do not preempt state prudential regulation of U.S. insurers
- Limiting the scope of agreements to recognizing a level of supervision consistent with state protections
- Enhanced Congressional involvement and consultation, and improved judicial review on preemptive determinations
- A clear retention of state authority over the business of insurance
The original bill was introduced in May by Congressman Paul E. Kanjorski, (D-Pa.) and Congresswoman Judy Biggert (R-Ill) to establish, what would be, a Federal Insurance Office in the Treasury Department.
The office will be charged with the collection of insurance data to advise Treasury on domestic and international policy issues, report to Congress every two years and create federal policies related to international insurance issues.
The NAIC’s letter to the the House Financial Services Committee may viewed online at the NAIC Web site, www.naic.org.
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