NU Online News Service, July 14, 2003, 5:51 p.m. EDT — Washington
Sen. Ernest Hollings, D-S.C., has introduced S. 1373, a bill that would put the federal government in charge of regulating insurance.
The bill would establish a five-member Federal Insurance Commission housed at the Commerce Department that would establish licensing and financial standards for the insurance industry, regulate rates and policies, oversee solvency, investigate market conduct and establish accounting standards.
The bill, the Insurance Consumer Protection Act, also would repeal the insurance industry’s McCarran-Ferguson antitrust immunity.
The new federal regulatory system would not be optional. All insurance companies that engage in interstate business would come under the authority of the Federal Insurance Commission.
Only insurance companies that did business solely in the state in which they were domiciled would be state regulated.
The Federal Insurance Commission would regulate all lines of insurance, including property-casualty insurance and life insurance.
In addition to creating the insurance commission, the Hollings bill would:
? Create a Federal Guaranty Corp. that would liquidate insolvent companies and pay claims to affected policyholders.
? Set up an independent office within the Federal Insurance Commission that would receive complaints from consumers about improper industry practices and represent consumers before the commission.
? Give consumers the right to challenge rate applications filed by insurance companies.