The incoming chairman of the House Financial Services Committee is supportive of an optional federal charter for life insurers, but is “skeptical” about whether it would be appropriate for property/casualty insurers.
At the same time, Rep. Barney Frank, D-Mass., said that renewing the Terrorism Risk Insurance Act is a “very high priority” for his committee.
Frank would not give a timetable for action, but said he wants to send a signal to remove any uncertainty in the marketplace that TRIA would expire as scheduled on Dec. 31, 2007. The committee will act to make certain TRIA “won’t lapse,” he said.
Frank made his comments as the opening speaker at the Consumer Federation of America’s 19th Annual Financial Services Conference, being held here.
Regarding the OFC, which American Council of Life Insurers president and CEO Frank Keating said at a meeting of banking and insurance lobbyists last week “is the top priority of the ACLI for the third year in a row,” Frank said the need for such legislation is “debatable.”
Life insurance, he said, “has increasingly become a financial product with no geographical issues,” in contrast to an OFC for p/c insurance, which is “more regional.”
Asked to respond to speculation within the industry that the price for an OFC would be compliance with the Consumer Reinvestment Act, which gives bank regulators some oversight over the activities of banks, Frank dismissed it. “There are no deals in the works,” he said.
“That all lies ahead,” Frank said, at the same time declining to give a timeline on either hearings or action on issues relating to insurance regulation.
Frank said the committee’s first priority would be dealing with uniform consumer protections. The committee would act on legislation providing “reasonable consumer protections that do not disrupt the economy,” he said.
Frank also said he sees the utility for uniformity in consumer protection laws and rules–because some states have strong consumer protection statutes while others have weak ones or none at all–but that one of the committee’s priorities will be ensuring that when federal regulators pre-empt a state consumer protection law, that they have the authority to impose a uniform federal one. “There are good arguments for uniformity,” he said.
For the insurance industry, that would specifically deal with how insurers react to data breaches.
He also said there would be “no change” in the committee’s jurisdiction, meaning that Rep. John Dingell, D-Mich., would not get his way in having some jurisdiction over financial services.
Earlier, however, he disclosed that he has asked incoming Speaker Nancy Pelosi, D-Calif., if a “task force” comprised of the House committees with oversight over consumer protection laws could be established. For example, there are 4 or 5 bills dealing with data security being dealt with in both the House and Senate.