NU Online News Service, Feb. 14, 4:52 p.m. — Washington
The ranking Democrat on the House Financial Services Committee has introduced an optional federal chartering bill, H.R. 3766, that would require insurance companies to consider community investments and would repeal the McCarran-Ferguson Act for all insurers.
In addition, it would adopt national standards on market conduct and require all insurers to collect demographic data on their policyholders.
Called the Insurance Industry Modernization and Consumer Protection Act, the legislation would not directly regulate insurance agents or brokers. Thus, state licensed insurance agents could sell insurance for national companies.
This contrasts with other optional federal chartering proposals on the table, which would require insurance agents to obtain a national license in order to represent national insurers.
However, the bill, introduced by Rep. John LaFalce, D-Buffalo, N.Y., would allow the regulator for national companies, called the Office of National Insurers, to enforce unfair and deceptive trade practice rules against agents and brokers with respect to insurance products issued by national companies.
Also in contrast with other proposals, the LaFalce bill would repeal the McCarran-Ferguson antitrust immunity for the business of insurance across the board, regardless of whether an insurer is nationally or state licensed.
As for market conduct, the legislation would incorporate New York state laws related to unfair and deceptive trade practices as establish them as minimum standards that would apply to all states.
Jack Dolan, a spokesman for the American Council of Life Insurers, Washington, says ACLI shares LaFalce’s interest in optional federal chartering, but has some problems with his legislation. These include the market conduct standards, the demographic data collection requirement and the voluntary community reinvestment provision.
The House Financial Services Committee has posted a written version of LaFalce’s statement introducing the bill on its Web site, at http://www.house.gov/banking_democrats/pr_020214.htm
A copy of the text of the bill is available at http://www.house.gov/banking_democrats/lafalc_110.pdf