The House Financial Services Committee agreed by a voice vote Wednesday to approve a measure that could make regulation of reinsurers and surplus lines coverage more uniform.
One key section of the bill, H.R. 5637, would establish uniform regulation of reinsurer solvency based on accreditation standards developed by the National Association of Insurance Commissioners, Kansas City, Mo.
The reinsurance provisions also would give the ceding insurer’s state of domicile sole authority to govern reinsurance contracts and determine whether or not a particular reinsurance contract qualified for credit for reinsurance.
The bill would streamline regulation of multi-state property-casualty surplus lines insurance transactions, by establishing the insured’s home state as the regulator over the transaction. The insured’s home state would be responsible for collecting and allocating premium taxes.
H.R. 3637 was introduced by Reps. Ginny Brown-Waite, R-Fla., and Dennis Moore, D-Kansas.
The House Judiciary Committee will consider the bill next and decide whether it will merely support the bill or hold its own review, Moore says.
H.R. 5637 represents “the first step in this committee’s journey towards insurance regulatory modernization,” Rep. Michael Oxley, R-Ohio, the chairman of the House Financial Services Committee, said as lawmakers set about “marking up,” or editing, the bill.
The markup could be the last for Oxley, who is retiring from Congress this year at the end of his term.
The problems H.R. 5637 seeks to address have been keenly felt in Florida, but “this is not just a Florida problem,” Brown-Waite said. “What began in Florida is certainly rippling throughout the rest of the United States.”
The most senior Democrat on the panel, Rep. Barney Frank, D-Mass., thanked Oxley for modifying H.R. 5637 to reflect changes suggested by the NAIC.
Congress should be trying to improve insurance regulation, not working to nationalize insurance regulation or to pre-empt state insurance laws completely, Frank said.