The U.S. House of Representatives Committee on Financial Services has passed H.R. 2609, the "Federal Insurance Office Act," by a unanimous voice vote. H.R. 2609, introduced by Rep. Paul E. Kanjorski, D-Pa., would establish an Office of Insurance Information in the Department of the Treasury. A similar bill died in committee last year.
Rep. Melissa Bean, D-Ill., and Rep. Ed Royce, R-Calif., offered an amendment to H.R. 2609 that requires the director of the Federal Insurance Office to conduct a study on how to modernize and improve the system of insurance regulation in the United States. The study would consider the following:
Effective systemic risk regulation with respect to insurance.
Strong capital standards and an appropriate match between capital allocation and liabilities for all risk.
Meaningful and consistent consumer protection for insurance products and practices.
Increased national uniformity through either a federal charter or effective action by the states.
Earlier this year, Bean and Royce introduced H.R. 1880, which provides for an optional federal insurance charter.
The Automotive Service Association (ASA) says it supports H.R. 1880, specifically the federal regulation of property and casualty insurers. Two national associations representing insurers the American Insurance Association (AIA) and the Property Casualty Insurers Association of America (PCI) also support the bill. However, PCI expressed concern that Bean’s and Royce’s amendment casts a negative light on the insurance industry.
“Home, auto and business insurers have an excellent record of consumer protection, with more than 50 regulatory oversight agencies, and because we are so underleveraged and conservatively invested, we present no systemic risk,” said PCI President David Sampson. “We believe that the best way to assess this important issue is through a balanced perspective that does not presuppose elements of the study.”
ASA noted there are several key purposes for the Federal Insurance Office Act. The committee believes H.R. 2609 would leverage the federal government’s expertise regarding the insurance industry and that the Federal Insurance Office would offer a unified voice on insurance matters for the U.S. in global deliberations. Supporters also believe H.R. 2609 would help increase the knowledge base at the federal level to promote stability in the U.S. financial system.
View H.R. 2609