House Leader Pulls OII Bill Off Floor

Joel Wood, senior vice president of federal affairs at the Council of Insurance Agents and Brokers, Washington, cited the AIG rescue while reacting to the move to pull H.R. 5840 from the suspension calendar.

“In the aftermath of the federal government’s emergency $85 billion loan to AIG, it is disappointing and highly surprising that a misguided concern has been raised about this legislation by a freshman member,” Wood says.

“Other sources are dumbfounded that a member who has joined the committee hardly 6 months ago has taken on her chairman [Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee] and used her clout with the speaker to put the brakes in the middle of the AIG crisis,” Wood says.

“We are still confident that this bill will pass the House, but every concern about unjustifiable preemption of state law is specious,” Wood says.

“If anything, most people within the industry would argue that it doesn’t empower the federal government enough to fulfill its responsibilities to the national economy,” he says.

Consumer Watchdog, Santa Monica, Calif., a consumer group that helped pass California’s Proposition 103 property-casualty insurance rate control proposition, cited the AIG arrangement when it wrote to Congress to oppose H.R. 5840.

In the wake of the government’s decision to lend $85 billion to AIG for liquidity purposes, “Congress needs to rethink a proposal that would give the Treasury Department the authority to negotiate international insurance agreements and then preempt unspecified state laws that conflict with those agreements,” Consumer Watchdog writes.