Rep. Edward Royce, R-Calif., says he will be introducing a House bill that will resemble the Senate’s “optional federal charter” bill sometime this fall.
Like S. 2509, a bill introduced by Sens. John Sununu, R-N.H., and Tim Johnson, D-S.D., the Royce bill would give both life insurers and property-casualty insurers a choice between supervision by state insurance regulators and supervision by a new federal insurance regulatory agency.
Royce talked about his optional federal charter bill here Tuesday, at the annual conference of the American Bankers Insurance Association, Washington.
Insurance industry lobbyists are expecting Royce to introduce the House optional federal charter bill together with Rep. Paul Kanjorski, D-Pa.
Royce told ABIA conference attendees that his enthusiasm for creating a federal insurance regulatory system is partly the result of a period in the 1980s when he served in the California state legislature alongside John Garamendi, who is now California insurance commissioner.
Royce said he and Garamendi are far apart when it comes to their views about the roles state and federal agencies should play in insurance regulation.
The insurance industry “has suffered from years of Sacramento’s overregulation,” Royce says.
Worries about overregulation are “what caused the founding fathers to abandon the Articles of Confederation,” and establish the Commerce Clause in the Constitution, Royce said.
“It makes no sense to have a balkanized insurance regulatory system,” Royce said. “The United States is one marketplace.”
During an ABIA conference panel discussion, Jamie Burnett, Sununu’s legislative director, said Congress should start looking at insurance soon, to address issues such as renewal of the terrorism reinsurance program and changes to the flood insurance program as well as optional federal charter proposals.
This is a good time to tackle insurance legislation, because, “nationally and globally, there is no crisis in insurance,” Burnett said.
“When you deal with an issue during a crisis, you have to deal with unintended consequences,” Burnett said.