The Senate Banking, Housing and Urban Affairs Committee will be getting another chance to give insurers a choice between state and federal regulation.
Sen. Tim Johnson, D-S.D., who is set to become the second-ranking Democrat on the committee in January, says he and Sen. John Sununu, R-N.H., will reintroduce the National Insurance Act, a bill that would create an optional federal charter both for life insurers and property-casualty insurers.
S. 2509, the OFC bill that Johnson and Sununu introduced this year, died in committee.
“The introduction of S. 2509 generated much discussion within the insurance industry, and I look forward to continuing that discussion with the insurance industry and my colleagues into the 110th Congress,” Johnson says in a statement about his plans for a new OFC bill.
Sen. Christopher Dodd, D-Conn., is preparing to take over from Sen. Richard Shelby, R-Ala., as chairman of the Senate Banking Committee.
Dodd declined Wednesday to talk about OFC proposals or other items on his agenda, but he noted that he and Shelby worked together as Democrats both in the House and the Senate before Shelby became a Republican.
Dodd said he hopes members of the Banking Committee will try to craft legislation in a bipartisan fashion.
“I think the voters last week said they wanted not only a change in direction, but a change in tone,” Dodd said.
New Democratic appointees to the Banking Committee will include Sen. Daniel Akaka, D-Hawaii; Senator-elect Sherrod Brown, D-Ohio; Senator-elect Bob Casey, D-Pa.; Senator-elect Jon Tester, D-Mont.; and Sen. Herb Kohl, D-Wis.
Meanwhile, over in the House, Rep. Paul Kanjorski, D-Pa., is warming up to the OFC concept, according to Todd Harper, an aide to Kanjorski.
Kanjorski, the leading candidate for the post of chairman of the House Financial Services Committee capital markets subcommittee, initially supported the House OFC bill, then backed away when Rep. Barney Frank, D-Mass., raised questions about the fate of home and auto rate regulations.
Harper, who spoke at a seminar sponsored by Wiley Rein & Fielding L.L.P. and the University of Connecticut law school, said Financial Services Committee members are comfortable with the idea of dual regulation because of their familiarity with the dual regulation system for banks.
Enacting a life insurance federal charter bill would be easier than passing a bill that includes property-casualty insurance, but Congress could start with a life charter and then add property-casualty insurance to the program later, Harper said.
In other Capitol Hill news:
John Jonas, a senior partner at Patton Boggs L.L.P., Washington, says Democrats’ efforts to reestablish a pay-as-you-go budgeting system “represents a random threat to tax-advantaged insurance products.”
Under pay/go rules, Congress must offset every tax cut or spending increase with a tax increase or a spending cut.
But “there will be a number of opportunities for the life insurance industry on the savings side, especially on products designed to serve as an incentive to save for retirement,” Jonas says.