The House Financial Services Committee is developing a streamlined version of the State Modernization and Regulatory Transparency Act that would give strong regulatory authority to home-state regulators.
The redrafting could reduce the complexity of the bill and cut it to 60 pages, from the original length of about 300 pages.
SMART advocates are hoping the shorter version will make the bill less controversial, increase industry interest, and take attention away from an optional federal charter bill introduced in late April by 2 members of the Senate Banking Committee.
The SMART bill seems to be getting some support from the property-casualty insurance industry but little from the life insurance industry.
The latest version of SMART would give a home-state regulator “pre-emptive” national licensing authority over insurance agents in the regulator’s state and over carriers domiciled in the regulator’s state.
The regulator of the state of the policyholder would have pre-emptive authority over surplus lines.
The latest version would eliminate a “partnership” system described in earlier versions of the bill. The partnership system provisions would have created a federal office that would have worked with state officials to coordinate insurance regulation.
The revised bill also would set “prescriptive standards.” State regulators would have to meet the standards by a certain date or face sanctions, according to a lawyer who has seen a draft.