A House Financial Services Subcommittee may be moving more aggressively on insurance regulatory reform than previously thought and could have an incremental reform bill drafted by the end of March, National Underwriter has learned.
Several sources told NU that the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, which is chaired by Rep. Richard Baker, R-La., is beginning to draft a detailed set of reform principles that could become the basis of legislation.
These principles, the sources said, will reflect Bakers preference for incremental reform as opposed to optional federal chartering, but will call for a significant amount of uniformity and regulatory relief for the insurance industry.
The expectation is that the principles will be circulated to industry groups, state insurance commissioners and other interested parties prior to a hearing expected to take place during the week of March 29.
The sources said that if the reaction is favorable, the subcommittee could have a markup by Memorial Day. A markup is a formal session at which a quorum must be present and where members vote on whether to approve legislation. This would place insurance regulatory reform on a much faster track than many industry lobbyists expected.
At the end of last year, the general belief was that Bakers subcommittee would continue to hold hearings on insurance regulation and probably release a discussion draft of a reform bill toward the end of the session. There was little speculation that the subcommittee would have a markup this year.
But one lobbyist, who asked not to be identified, notes that the subcommittee already has conducted numerous hearings and meetings on insurance regulation. The subcommittee has a voluminous record, he says, and it is hard to see what would be the point of having further hearings unless the subcommittee is ready to advance a bill.
The principles being developed by the subcommittee are likely to either mandate the states to adopt certain uniform practices in such areas as speed-to-market and market conduct, or create incentives for states to establish uniformity.
Reproduced from National Underwriter Life & Health/Financial Services Edition, February 27, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.