NU Online News Service, March 16, 2004, 5:26 p.m. EST, New York – The U.S. House could consider a bill that would create a federal insurance advisory board.[@@]
Rep. Michael Oxley, R-Ohio, chairman of the House Financial Services Committee, sketched out what a bill might look like here during a closed forum at the spring meeting of the National Association of Insurance Commissioners, Kansas City, Mo.
NAIC officials who saw the speech say Oxley is suggesting that the federal government might start by creating limited federal “regulatory tools” rather than by creating a full-blown federal insurance company charter.
A federal regulatory tools bill could follow the example set by the Gramm-Leach-Bliley Financial Services Modernization Act of 1999, according to Ernst Csiszar, NAIC president and South Carolina insurance director. A section of GLB required 29 states to establish uniform or reciprocal insurance producer licensing requirements by November 2002 or face a federal takeover of the producer licensing process.
Csiszar says Oxley talked about the House creating an insurance board that would act in an advisory role, rather than in a regulatory role. The advisory board might include representatives from the NAIC, the Federal Reserve Board, the U.S. Treasury and the U.S. Securities and Exchange Commission.
“Those who have looked at Mr. Oxley’s career will see a record of undertaking and completing [tasks],” Csiszar says.
The Senate seems to have different priorities than the House does, but “that could change very quickly,” Csiszar says.
New York State Insurance Superintendent Gregory Serio says the possibility that creating a federal insurance advisory body could be a first step toward creating federal insurance oversight is “a fair concern.”
“The details will be crucial,” Serio says.
In related news, commissioners continue to debate whether the NAIC should try to support the Market Conduct Surveillance model law developed by the National Conference of Insurance Legislators, Albany, N.Y., at a March 31 hearing of the House Financial Services Committee.
NCOIL adopted the model Feb. 27.
Commissioners agreed at the spring NAIC meeting to try to address some states’ concerns about the model and have the NAIC show some support for the model before the March 31 hearing.
Jorge Gomez, Wisconsin insurance commissioner, asked why the hearing was so important that the NAIC had to change its usual procedures. “Not all of the commissioners believe in that urgency,” Gomez said.
Gomez argued that some language in the model could take away commissioners’ current discretion and authority.