Some Thoughts On Recent Happenings On The Hill
Some quick thoughts:
Congress and Federal Regulation of Insurance: During a recent hearing on efforts by the states to streamline agent licensing, I couldnt help but be impressed by what seems to be a growing skepticism among members of Congress about state insurance regulation.
That hearing in Congress tells part of the story. Specifically, at that hearing, at least two prominent members of the House Financial Services Committee (Republicans, incidentally) expressed serious doubts about whether the states, despite the best of intentions, would succeed in creating an efficient, uniform agent licensing system nationwide.
But also apparent was the lack of expression of strong support for continued state regulation by any members of the Committee.
Since the early 1990s, when Rep. John D. Dingell, D-Mich., began questioning state insurance regulation, hearings such as those on agent licensing usually include at least one member offering a lively defense of state regulation.
Normally, this defense says that despite the weaknesses of state insurance regulation, it is better than one-size-fits-all federal regulation.
But during the agent licensing hearing, I dont recall any member of the Committee offering a strong defense of state regulation. While there were a couple of comments that no one is calling for federal regulation, at least not yet, the comments were tepid at best.
It may well be that this lack of enthusiastic support for state regulation was an anomaly. Perhaps the sincere supporters of state regulation, for whatever reason, chose not to attend the hearing.
But I have to wonder whether all the recent movement on optional federal chartering and the relentless criticism of state regulation, even among industry groups that say they support the current system, is beginning to have an impact.
I still do not believe that the 107th Congress will seriously consider optional federal chartering, but I wouldnt make any bets about the 108th Congress. I think all the trends are working against exclusive state insurance regulation.
The Leadership Change in the Senate: Forgive my cynicism, but whenever I read about “seismic” change in Congress, I start to yawn.