NU Online News Service, Oct. 29, 2004, 2:10 p.m. EST
Congress should repeal a law that stops the Federal Trade Commission from investigating the insurance industry, a consumer group says.[@@]
Commenting on New York Attorney General Elliot Spitzer’s widening investigation into alleged bid rigging and improper payments among brokers and carriers, the Consumer Federation of America, Washington, complains that Spitzer has virtually had to go it alone, without federal help.
The CFA argues that in 1981, Congress passed a law prohibiting FTC investigations on most insurance matters. The law only allows the FTC to conduct probes of the industry if specifically asked to do so by a Congressional committee.
“Most of the state insurance commissioners who are charged with overseeing the insurance industry were asleep at the switch while these abuses were occurring,” claims J. Robert Hunter, CFA’s director of insurance.
CFA says, however, that it opposes the proposed Oxley-Baker Act, which would give the federal government a greater role in insurance regulation.
The draft bill “does not establish minimum federal consumer protections or empower a federal regulator to investigate and prosecute the kind of abuses uncovered in Attorney General Spitzer’s investigation,” argues Hunter.