A subcommittee of the House Financial Services Committee will delve into the suitability of sales of insurance products to military personnel from marketers located near military bases in a hearing in early September. However, a spokesman for the panel said it was unclear how the committee would proceed beyond the hearing.
A staff official of the House Financial Services Committee confirmed last week that Rep. Mike Oxley, R-Ohio, the committee chairman, has asked his staff to prepare a hearing to be held by a subcommittee; multiple witnesses are expected to testify. The hearing is in response to articles published in the New York Times recently taking aim at alleged sales of unsuitable insurance products to military personnel.
Additionally, Oxley said during an appearance on CNBCs Kudlow & Cramer that some of the problems exposed by the Times articles may be dealt with through insurance regulatory reform legislation he is crafting with Rep. Richard Baker, R-La., who chairs a key subcommittee. A provision has been prepared for that legislation, called the “roadmap,” that would clarify that such sales are subject to state regulation.
However, no decision has been made as yet as to whether it will be included because the industry is concerned about such a provision.
No one would comment for the record, but it has been learned that several trade groups are currently studying the issue. The industry concern is that attaching the provision to such priority legislation might mean it will be pushed through quickly, without a thorough understanding of how it might impact marketing of other products, and because it might impose unnecessary and burdensome requirements on the entire industry even though such sales are being made by a handful of specialized marketers.
Oxley said he and Baker are moving to introduce the bill before the summer recess and, while acknowledging that the military can take steps to bar companies from operating on military base grounds, he hopes the bill provides some clarity as to which state regulators have jurisdiction over such sales.
“Thats one of the things we are wrestling with on this insurance reform bill that we hope to introduce before the Congress adjourns [this fall] so we can get at least a place where we can start to discuss these very important issues trying to unify more of the state laws and state regulatory regimes,” Oxley said. “We have had pushback from some states on trying to get these more uniform. We have to recognize we have a national marketplace; these products are being sold in all 50 states. And we have to have some kind of ability to have commonality in the regulatory structure, and that should take place, whether its in Ohio or Texas.”
Reproduced from National Underwriter Edition, July 29, 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.