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Lawmakers Advance Federal Regulation Efforts

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The House Financial Services Committee Capital Markets Subcommittee will hold a hearing Tuesday on a bill that could create an insurance information office within the U.S. Treasury Department.

The department recommended creating the office in a financial services modernization blueprint unveiled March 31.

Rep. Paul Kanjorski, D-Pa., chairman of the Capital Markets Subcommittee, has introduced a bill, H.R. 5840, that would implement the insurance office provision by creating an Office of Insurance Information.

In addition to gathering data, the OII would give advice on insurance regulation to officials in the Executive Branch.

In addition to convening the Capital Markets Subcommittee hearing, Kanjorski released proposed changes to his bill.

The changes deal with matters such as potential conflicts between state regulations and international agreements and the OII’s main sources of balance sheet and market conduct information.

One provision specifies that the OII would get balance sheet and market conduct data from the National Association of Insurance Commissioners, Kansas City, Mo.

Another provision would make a representative of the Federal Trade Commission a mandatory member of a board that would advise the Treasury secretary on insurance-related issues.

Insurers have clashed with the NAIC over the handling of market conduct data, and the FTC was barred through a provision in 1980 from investigating insurance companies unless it is authorized to do so by Congress.

In other federal insurance regulation news:

- Rep. Barney Frank, D-Mass., chairman of the House Financial Services, said at a recent meeting of life industry officials in Washington that enactment of legislation in the next Congress creating an optional federal charter is his “top priority.”

According to attendees, Frank said the bill would be a “very broad proposal,” on which action would be “front and center in 2009.”

- The board of the American Council of Life Insurers, Washington, plans to decide June 13 whether it will support H.R. 5840.

Steven Brostoff, an ACLI spokesman, says the trade group “is greatly encouraged” by Kanjorski’s bill and “supports the concept that a federal office is vital to represent the U.S. internationally on insurance issues and coordinate with state insurance regulators on national concerns.

“We continue to monitor the legislation and look forward to commenting further as it evolves,” Brostoff says.

He says the ACLI expects “to see a new OFC bill next year.”

The ACLI looks forward to working with Frank and Kanjorski to develop a strong proposal that can advance in the new 111th Congress,” Brostoff says.