Sen. Christopher Dodd says Congress really could pass a federal Office of Insurance Information bill this year.
H.R. 5840, a bill endorsed by the House Financial Services Committee capital markets subcommittee earlier this month, would create an OII within the U.S. Treasury Department.
Dodd, D-Conn., chairman of the Senate Banking Committee, talked about the bill today during a committee hearing on insurance regulation.
Dodd said he was surprised by the level of insurance industry interest in legislation giving the federal government a role in insurance regulation, and the growing interest in giving insurers the option of choosing between the traditional state insurance regulation system and a new federal regulation system.
“A few years ago, even the notion of a federal charter would have been meet with vehement opposition,” Dodd said. “It was the third rail.”
Dodd said he always felt a case could be made for an OFC system for life but has believed that differences in state tort laws would make creating an OFC system more difficult on the p-c side.
Dodd said he thinks the Senate may be able to move forward before it adjourns in September on a bill that would be narrower than an OFC bill.
But “it doesn’t take much to stop things in the Senate,” Dodd said. “With the limited amount of time left, that 101st senator begins to emerge, and that’s the clock.”
Dodd said his staffers will be talking to other Senate staffers about possibly getting something done in the next couple of months.
Also at the hearing, Sen. Richard Shelby, Ala., the highest ranking Republican member on the Senate Banking Committee, and Sen. Robert Corker, R-Tenn., a first-term senator, said they would support a bill giving insurers the option of choosing between state regulation and federal regulation.
In the 2 years since the last Senate Banking Committee hearing on insurance, “developments in our insurance markets, as well as regulatory reforms abroad, have strengthened the case that our insurance regulatory structure is out of date,” Shelby said in his opening statement.
Shelby cited the problems in the bond insurance market and insurance company investments in mortgage-backed securities as examples of concerns that suggest that the current insurance regulatory system may be out of date.