A Bush administration official is preparing to testify July 18 at a second Senate Banking Committee hearing on insurance regulation.
The witness list for the hearing includes Terri Vaughan, a former Iowa insurance commissioner; Scott Harrington, a health care finance researcher who teaches at Wharton; and Randal Quarles, Treasury under secretary for domestic finance.
The Senate Banking Committee held its first insurance regulation hearing Tuesday, and some are saying it may hold a third hearing in September.
One topic of discussion at the hearing is likely to be S. 2509, an “optional federal charter” bill. The OFC approach would give insurers a chance to choose between being regulated by state officials or by a new federal agency.
Treasury has not endorsed S. 2509, and Quarles is still preparing his testimony, a Treasury official says.
But Treasury officials praised the authors of S. 2509 for contributing to discussions about insurance regulation reform when the bill came out.
Emil Henry, assistant Treasury secretary for financial institutions, has been asking insurers, brokers and others about what they think of the idea of the administration supporting an OFC proposal, a lobbyist says.
During the first hearing, representatives for the American Council of Life Insurers, Washington, and the American Bankers Insurance Association, Washington, spoke in favor of S. 2509.
In many other countries, “insurance regulation is uniform,” said Alan Liebowitz, chairman of the ABIA government policy committee. “As a result, consumers and insurers are not subject to policy or pricing differences simply because of their location.”
But Rob Hardy, who spoke for the National Alliance of Life Companies, Chicago, a group that represents small insurers, supported the current, state-based system.
“Proponents of a federal regulator want a simple, one-stop shop to provide greater efficiency and uniformity for the insurance industry,” Hardy said. “Based on that premise, one could argue for federalizing first responders, state health or environmental agencies, or even education. Should we simply federalize all of those functions for the sake of convenience? No one who believes in our republic can seriously believe that such action would be a good idea.”
Frank Wald, president of the National Conference of Insurance Legislators, Troy, N.Y., did not testify at the hearing, but he wrote a letter to Senate Banking Committee leaders that criticizes both the Senate optional federal charter bill and House efforts to use federal “tools” to persuade states to make insurance laws and regulations more uniform.
The initiatives would interrupt states’ own efforts to modernize the insurance regulation system, Wald writes in the letter.