NU Online News Service, April 1, 2004, 5:33 p.m. EST – Current members of Congress are not the first who have thought about the possibility of expanding federal insurance oversight.[@@]
President Theodore Roosevelt and other officials championed the cause of federal insurance regulation in the early 1900s.
Here is an excerpt from an article about the topic reprinted from the Feb. 26, 1903, issue of National Underwriter’s old Western Underwriter edition:
New York ? (Special) The persistent work put in by prominent life insurance interests in behalf of national regulation was not without its effect, although the plans as originally outlined miscarried. In the legislation adopted by Congress, establishing a department of commerce and labor, the subsidiary “bureau of corporations” is granted some degree of oversight of insurance companies?.
The final draft of the bill establishing the department of commerce indicates that some very skillful and efficient work was performed at the last moment by those interested in the insurance phase of the question.
Sentiment Has Steadily Grown
The sentiment among insurance men, particularly among life insurance companies, in favor of national regulation, has steadily grown within the past few years. The increasing exactions of the States, the unnecessary and expensive examinations, the petty requirements and the many forms of hindrance to the business have served to center the attention of underwriters on the necessity for national regulation. The proposed establishment of a department of commerce at Washington, showing how widespread was public sentiment in favor of the national oversight of corporations, afforded an opportunity for those who were looking for just such an occasion.
Curiously enough, the first attempt to establish a bureau of insurance in connection with the department of commerce failed. For some singular reason the sentiment in favor of national oversight of corporations did not extend to insurance companies, although the business of these companies is more national in character than that of any other enterprise. But insurance has proved a fruitful source of grafting for state politicians, and by resurrecting the ghost of the Paul vs. Virginia case, the enemies of national insurance regulation induced Congress to throw out the provision for a bureau of insurance?.
Can Insurance Be Called Commerce?
An interesting question arises in connection with the whole matter. A quarter of a century ago, in the case of Paul vs. Virginia,* the Supreme Court of the United States declared that insurance was not commerce, and many important state decisions have hinged upon this principle?.
* The Supreme Court overturned Paul vs. Virginia in 1944.