The U.S. House Committee on Financial Services has held a hearing on “The Impact of Dodd-Frank’s Insurance Regulations on Consumers, Job Creators, and the Economy.” The panelists included The Hon. Bill Posey (R-Fla.); Dr. Robert P. Hartwig, president of the Insurance Information Institute; Birny Birnbaum, executive director of the Center for Economic Justice; Charles M. Chamness, the president and chief executive officer of the National Association of Mutual Insurance Companies (NAMIC); and Thomas P. Quaadman, vice president of the Center for Capital Markets Competitiveness at the U.S. Chamber of Commerce.
Birnbaum made the following comments regarding the Federal Insurance Office (FIO):
“The creation of the FIO by the Dodd-Frank Act (DFA) is a great benefit to insurance consumers, the insurance industry and state insurance regulators … The DFA also authorized the FIO to examine issues of insurance availability and affordability in traditionally underserved areas. Insurance has long been recognized as essential for individual and community economic development and access to affordable insurance is necessary for individual to build and protect assets.
"Most state insurance regulators individually and the National Association of Insurance Commissioners (NAIC) as an organization have, for decades, refused to examine and analyze availability issues. In particular, state insurance regulators have consistently refused to collect the detailed data necessary to even assess the state insurance availability and affordability in low-income and minority communities. The DFA gives the FIO authority to collect data from insurance companies, if and only if, those data are not otherwise available and not collected by state insurance regulators.”
Chamness also mentioned his thoughts on the FIO in his testimony:
“Although the Federal Insurance Office is meant to be a source of information and expertise and not a regulator, it was granted the authority to subpoena insurance companies for information as well as preempt state law for the purposes of complying comments of the National Association of Mutual Insurance Companies (NAMIC) with international trade agreements. While it may be a rare occurrence when the FIO utilizes either of these powers, the fact remains that the office has them and it leads to further uncertainty about future regulation and compliance.
"NAMIC commends the committee for continuing to seek reassurances that FIO understands that its role is to monitor the insurance industry, not to regulate it, and to resist efforts to expand the authority of the office to supervisory functions. We also continue to urge FIO Director Michael McRaith to utilize his office to monitor the work of federal financial regulatory agencies and educate these agencies about the differences between insurance and banking, ensuring that federal regulatory proposals properly respect the authority of the states to regulate the business of insurance.”
The Automotive Service Association (ASA) supported creation of the Federal Insurance Office and has encouraged the expansion of its insurance regulatory authority.
To view the full text of the testimony, visit ASA’s legislative website at www.TakingTheHill.com.