Rep. Richard Baker, R-La., one of the senior Republicans on the House Financial Services Committee, is giving up his seat in Congress to become head of the Managed Funds Association.

Baker, a former chairman of the Financial Services Committee’s Capital Markets, Insurance and Government Sponsored Enterprises Subcommittee, has played a key role in matters such as the debate about whether to give insurers the option of choosing to be regulated by a federal agency.

Although Baker has served in Congress for 22 years, Rep. Spencer Bachus, R-Ala., became the highest ranking minority member of the House Financial Services Committee when the Democrats gained a majority in the House after the 2006 elections.

Another lawmaker ended up serving as the highest ranking Republican on the capital markets subcommittee.

Baker’s departure is a “great loss” for both Congress and the House Financial Services Committee, says Jill Edwards, director of federal relations at the National Association of Insurance and Financial Advisors, Falls Church, Va.

“During his tenure, Congressman Baker’s extensive knowledge of complicated insurance markets has made him an invaluable asset in the debate over important issues to NAIFA such as insurance regulatory reform,” Edwards says. “He will be missed.”

Baker is the second Louisiana Republican to leave Congress during this term. Rep. Bobby Jindal, R-La., was sworn into office on Jan. 14 as governor of Louisiana.

Louisiana will hold an election to fill Jindal’s seat March 8, and it may hold an election to fill Baker’s seat on the same date, according to press reports.

At the MFA, Washington, a group that represents hedge funds, Baker will be succeeding John Gaine as president.

MFA Chairman Eric Vincent praised Baker’s “extensive knowledge of and broad experience” with financial service issues.

“His expertise in this area, coupled with his deep understanding of the impact of policy making on U.S. capital markets, investment advisers and investors, make him the ideal leader for our industry,” Vincent says in a statement.

Baker says he has “come to appreciate greatly the vital role played by the alternative investment industry in our economy and the importance of its continued success to the competitiveness of our nation’s capital markets.”

Gaine will stay with the MFA as a special advisor and oversee the group’s efforts to reach out to regulators and policymakers outside the United States, the MFA says.