The Consumer Federation of America says the new Sununu-Johnson optional federal charter bill represents a wish list of regulatory giveaways that would be extraordinarily harmful to consumers.
The bill, S. 2509, would let states choose being regulated by state insurance regulators or by a new, national insurance commissioner.
“In the name of regulatory ‘uniformity,’ the bill accomplishes the unlikely feat of lowering consumer standards for insurance policyholders below the already weak protections that exist in many states,” according to the CFA, Washington. “Meanwhile, it allows insurers to play federal and state regulators off each other in an effort to keep regulatory standards low.”
The new federal insurance regulatory agency would have little ability to regulate the form of insurance policies and no ability to regulate rates, the CFA says.
In addition, because insurers would still have to pay state premium taxes, the new system would be more expensive than the old system, the CFA says.