Companies and Regulators Have Questions
By Arthur D. Postal
Washington Bureau Chief
While life insurance agents are broadly supportive of the so-called federal “roadmap” legislation unveiled recently by the House Financial Services Committee, the companies are still hammering out their position. Regulators also have their concerns.
What Your Peers Are Reading
A major concern of regulators with the life provisions of the legislationand their support is critical for the legislation to move forwardis with the title calling for creation of a “State-National Insurance Coordination Partnership.”
This concern was voiced last week by Greg Serio, New York Superintendent of Insurance and chairman of the National Association of Insurance Commissioners government affairs panel.
Regarding the title calling for a state-national partnership, Serio asked, “Why is it there? What is it supposed to do?”
The partnership establishes a 7-member panel composed of 3 insurance commissioners from each of small, medium-sized and large states, and “designees” of the Treasury Department, the Securities and Exchange Commission and the Federal Reserve Board. Its chairman will be nominated by the state insurance commissioners and appointed by the president to serve as chairman and break tie votes.
Representatives will be balanced between political parties and will rotate the site of meetings. The partnership will have two separate liaisons, one coordinating international insurance representation of the U.S. and another to analyze “the effects of national financial policy on the insurance marketplace.” This panel “will have no regulatory authority, but will promote uniformity, assess compliance with this act, mediate and resolve conflicts among government agencies, and conduct appropriate arbitrations of interagency conflicts.”
Moreover, it will not have a permanent office and will be allowed only one liaison per member and minimal clerical staff to ensure “the partnership remains only a coordinating entity.”
Serio explained that the problem with such a body is that it lacks a concrete format and structure. Therefore, it is not needed, he argued, because of changes in state regulation that are ongoing as well as the changes proposed in the bill.
Serio said the commissioners will meet this week in a conference call to discuss the legislation, but he did not indicate when they will meet with the House Financial Services to discuss their problems.
Timing is crucial, since the committee wanted to hold a hearing on the legislation this month and perhaps a markup in the Capital Markets Subcommittee by October. Congress only has 30 legislative days remaining before it adjourns relatively early in October because of the election.
While the ACLI and its members are warming to the bill because they realize the optional federal charter has little political support at this time, some type of ongoing federal involvement is seen as important to winning the support of the ACLI and its members to the bill.