Insurance regulation overhaul bill attacked by legislators and consumer reps
By Arthur D. Postal
The House Financial Services Committee is slowing its pace on action on the so-called “roadmap,” or insurance regulatory modernization legislation, citing the lack of time and the press of other, greater priority business, including a plan to push through legislation that clarifies and tightens the sale of life insurance on military bases.
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The committee also plans to act on legislation that would extend the Terrorism Risk Insurance Act. The bill the House panel will take up will cover group life insurance.
It was learned at press time that the TRIA bill, including a group life provision, will be marked up by the full committee on Sept. 29.
One option regarding action on TRIA being considered by the congressional leadership calls for it to be added to the 9/11 Commission Report legislation that is considered a must-do by the leadership, either during the current session or during the lame-duck session following the election that the House Republican leadership says will have to be convened.
Regarding sales of insurance on military bases, legislation on the issue recently was introduced by Rep. Max Burns, R-Ga., which would specify the authority of state regulators over sales that take place on military bases in their states, and ban certain products from being sold on military grounds.
Rep. Steve Israel, D-N.Y., also had introduced a bill dealing with the issue, but that bill has been referred to the House Armed Services Committee. Rep. Rahm Emmanuel, D-Ill., also said that he planned to introduce a bill whose co-sponsor will be Sen. Hillary Clinton, D-N.Y. The Emmanuel/Clinton bill would ban sales of contract mutual funds.
House Financial Services Committee officials and lobbyists close to the issue say it is likely that a combination of the Burns/Emmanuel/Clinton legislation will be dealt with by the committee.
Staff officials and trade group officials close to the Financial Services panel last week denied that strong criticism of the plan from state regulators, legislators and consumer groups has had any impact on their game plan for action on the so-called SMART legislation, or the State Modernization and Regulatory Transparency Act.
They denied that comments by the leadership of the National Conference of Insurance Legislators that the role of the federal government in insurance regulation should be limited to such national issues as terrorism and catastrophe insurance had led to reconsidering how fast the legislation would move.
Under the current plan, the SMART bill will be introduced late this month, and an informational hearing will be held on it by the Capital Markets Subcommittee before Congress recesses by mid-October to campaign.
Instead, the panel will deal with the Terrorism Risk Insurance Act and legislation imposing greater controls on sales of life insurance at military bases, an issue that was the subject of a recent hearing by the panels Capital Markets Subcommittee.