The U.S. House Financial Services Committee has put off an effort to show its insurance regulation “roadmap” bill to insurance industry representatives.[@@]
Sources say the committee was going to show the bill to insurance industry representatives today, but they report that the unveiling was delayed because some Democrats and industry representatives are objecting to language that would effectively end rate regulation for property-casualty companies.
Sources say the current version of the bill includes the following:
- An interstate compact that would create a single point of entry for filing new life products. If the compact approved a product, the approval would be good in every state.
- A “Federal Partnership Office” that would have authority to preempt state regulation. If a state joined an interstate product filing compact, then filed to comply with compact provisions, the FPO or an insurer might be able to sue the state in federal court.
- Deference to the agent licensing procedures in an agent’s state of domicile or an insurance company’s state of domicile. Although at least 32 states already recognize the licensing authority of other states, “the remainder have add-on requirements that are redundant, duplicative, unnecessary and have nothing to do with standards of professionalism,” says Joel Wood, chief lobbyist for the Council of Insurance Agents and Brokers, Washington.
- State licensing authority access to federal criminal databases. But the Treasury Department has complained in the past about the cost of giving states secured access to the databases, and industry reps and congressional reps say it is unclear whether Treasury has signed on to the current proposal.
- Rules limiting states to conducting 1 market conduct compliance examination every 5 years, unless a state were responding to complaints against a company or agent. Agents and other personnel of a particular company would be subject to the rules of the domiciliary regulator, although other states could participate in such an exam. Congressional staffers and industry officials familiar with the current roadmap draft are calling this provision a “procedural reform.”
Advocates of the roadmap bill are hoping to unveil a draft for public comment soon, adjust the draft during the upcoming congressional recess, hold a hearing on the bill when Congress reconvenes in early September, and then have a vote within the committee later in September
Sen. Richard Shelby, R-Ala., chairman of the Senate Banking Committee, has promised to hold a hearing on insurance issues in September, but some say the roadmap bill might not get very far in the Senate because of time constraints.
If the bill wins overwhelming support in the House, that could set the stage for quick action on the bill early in the next Congress, observers say.