A life insurance official will testify Wednesday before a House panel on a bill that could require states to establish a uniform system of regulation for surplus lines and reinsurance products.
The hearing, before the Capital Markets Subcommittee of the House Financial Services Committee, concerns efforts to create a uniform regulatory system for the insurance industry by dividing the State Modernization and Regulatory Transparency Act bill into smaller bills that are easier to pass.
The uniform regulation bill, the Nonadmitted and Reinsurance Reform Act, is, in effect, a component of the SMART Act bill, observers say.
In May, House Financial Services Committee staffers were drafting a proposal that could give pre-emptive regulatory authority to home-state regulators.
The plan was to present a finished product to the 2 primary sponsors of the SMART Act, Reps. Michael Oxley, R-Ohio, chairman of the House Financial Services Committee, and Richard Baker, R-La., chairman of the capital markets subcommittee.
The Senate is considering another proposal that would give insurers the option of coming under the jurisdiction of a federal insurance regulatory agency.
The new bill would create a uniform system of premium tax allocation and collection for surplus lines and reinsurance.
It also would provide for deference to the policyholder’s home-state regulator for the nonadmitted market, and it would turn the nonadmitted insurance model act developed by the National Association of Insurance Commissioners, Kansas City, Mo., into a federal law.
The bill would rely on the home state for oversight to ensure the carrier’s reinsurance solvency while prohibiting extra-territorial application of state law.
The bill was introduced by Rep. Ginny Brown-Waite, R-Fla., and Rep. Dennis Moore, D-Kan.
An NAIC official said in response to the new bill that it is analyzing it and plans to monitor the congressional hearing.
“The NAIC will offer any technical guidance as appropriate,” says NAIC spokesman Scott Holeman.