Close Close

Life Health > Life Insurance

Royce Says House OFC Bill Will Be Introduced This Fall

Your article was successfully shared with the contacts you provided.

Rep. Edward Royce, R-Calif., confirmed on Sept. 12 that he plans to introduce a House version of optional federal charter legislation this fall, possibly as early as later this month.

Rep. Royce made his comments at the American Bankers Insurance Association Annual conference here.

Rep. Royce’s optional federal charter bill will be based on the version proposed in the Senate by Sens. John Sununu, R-N.H., and Tim Johnson, D-S.D., and would include both life insurance and property and casualty lines, he said.

Earlier, on Sept. 11, during a panel discussion, an aide to Sen. Sununu discussed the importance of Congress examining the OFC issue.

Jamie Burnett, legislative director for Sen. Sununu, noted the time Congress is spending discussing insurance issues, including terrorism insurance, the National Flood Insurance Program and catastrophic coverage issue.

Citing the fact that Congress will have to deal with the NFIP program this year and whether to extend TRIA when it sunsets Dec. 31, 2007, “will have to be dealt with relatively soon,” Mr. Burnett said. “Congress should be more proactive in looking at insurance.”

He explained that, “while nationally and globally there is no crisis in insurance,” the lack of the need for immediate legislation “gives us a window to look at reform at a more leisurely pace.”

Otherwise, Mr. Burnett said, “when you deal with an issue during a crisis, you have to deal with unintended consequences.”

He was supported by another panelist, state Rep. Shirley Bowler, R-La., who noted that during a recent session, “I saw the Louisiana state legislature beating up on the insurance industry” even though the industry had to deal with an unprecedented crisis in Hurricane Katrina, and has paid $10 billion to settle claims in the Gulf Coast region in only a year.

One potential benefit of an OFC, she said, was that it could allow agents to represent insurers throughout the state “by eliminating some of the regulatory impediments to providing broader service to consumers.”

In his comments Tuesday, Rep. Royce said that his “enthusiasm” for creating a federal insurance regulatory system is “partly a result of me being from California,” where he said he served in the state legislature with current California insurance commissioner John Garamendi during the 1980s.

Rep. Royce said that he and Mr. Garamendi “couldn’t be farther apart” on the issue of state versus federal insurance regulation, and that the industry “has suffered from years of Sacramento’s overregulation.”

Worries about such overregulation, he added, are “what caused the founding fathers to abandon the Articles of Confederation” and establish the Commerce Clause in the Constitution. “It makes no sense to have a balkanized insurance regulatory system,” he said. “The United States is one marketplace.”


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.