The House Financial Services Committee renewed efforts on June 21 to streamline insurance regulation through federal legislation by hearing industry views on a bill proposed earlier in the week that narrowly targets reinsurance.
The bill and the hearing focused on legislation that would establish a uniform system of regulation for surplus lines and reinsurance.
But congressional supporters and a representative of the life industry noted that Congress should also consider broader legislation introduced in April in the Senate that would create an optional federal charter for insurers.
The hearing was convened by the Capital Markets Subcommittee of the full committee.
At issue in the hearing was a legislative proposal by Reps. Ginny Brown-Waite, R-Fla., and Dennis Moore, D-Kan., the Nonadmitted and Reinsurance Reform Act, H.R. 5637.
The bill would establish a uniform system of premium tax allocation and collection for surplus lines, and bar states from asserting the extraterritorial application
“We have concerns about the current 50-state system of regulating life reinsurance, testified David Gates, a senior vice president, general counsel and secretary of Generali USA Life Reassurance Company, Kansas City, Mo. Gates represented the American Council of Life Insurers, Washington. “U.S. regulation of life reinsurance has become increasingly ad hoc and inconsistent. It has not kept pace with the risk-based regulatory standards of competing financial sectors, such as banking. It has not recognized newer forms of reinsurance as prudent risk management tools for life insurers in their development of consumer-driven financial and retirement security products.
“In short, the current 50-state system of regulating life reinsurance has not adapted to current best-practices standards of financial supervision and is an impediment to progress.”