Legislation approved July 10 by a House Financial Services Subcommittee would streamline multi-state agent licensing and establish an official insurance presence in Washington.
The legislation is now expected to go directly to the House floor, according to industry lobbyists and congressional staffers.
But, due to the congressional effort to deal with the housing and financial crisis, floor action might be delayed until Congress returns from its August break in early September, officials say.
The National Association of Registered Agents and Brokers Reform Act, or H. R. 5611, and the Insurance Information Act, H.R.5840, were passed via a voice vote by the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises.
The OII bill was introduced by the subcommittee’s chairman, Rep. Paul Kanjorski, D-Penn., who noted that it “promoted an idea that I have long held, that the federal government should have an in-house expert on insurance issues.”
Rep. Kanjorski offered an amendment making changes designed to assuage the concerns voiced by some critics of the bill. The amendment created a specific role for the National Conference of Insurance Legislators, Troy, N.Y., on the OII’s advisory board, and language giving the OII authority to pre-empt state laws was clarified to apply, he said, under “very narrow circumstances and with a very detailed procedure.”
Rep. Chris Shays, R-Conn., said the bill struck a “careful balance” between those who believe in federal oversight and those who would keep insurance regulated by the states.
Both carriers and agents’ groups have offered their support for the bill.
Frank Keating, president of the American Council of Life Insurers, Washington, praised the OII bill’s passage as addressing a “vital policy gap” given the national and increasingly global nature of the insurance marketplace and the economy in general.
“By creating a federal Office of Insurance Information, H.R. 5840 would, at long last, establish an advisory body that can analyze the impact of tax, retirement security, trade and economic legislation on insurance consumers, and do so on a national and an international basis,” he said. “The decisions made in Washington affect all insurance consumers regardless of where they live, and it is time the federal government developed the institutional expertise to evaluate insurance-related legislation on a national basis.”
In a letter to panel members, the National Association of Insurance and Financial Advisors, Falls Church, Va., saw a need for the bill based on a review of the current slate of insurance regulatory reform proposals.
“During that review, it became clear that there is a fundamental lack of understanding at the federal level regarding issues that impact professional agents and the industry on a national and international scale,” wrote NAIFA president Jeffrey Taggart and chief executive officer John Healy. “Currently there are 14 federal agencies that have a role in regulating insurance, and yet there is no central body of expertise at the federal level to provide advice and council to the Administration and Congress on policy matters impacting the insurance industry.”
Commenting on the legislation that would create an Office of Insurance Information within the Treasury Department, the Association for Advanced Life Underwriting, Falls Church, Va., said it sees creating the new office as an important first step toward an optional federal charter.