The Consumer Financial Protection Agency (CFPA) will not have oversight over life insurance and annuities. Rep. Gwen Moore (D-Wisconsin) and Rep. Erik Paulsen (R-Minnesota) successfully added language during mark up of the CFPA legislation held October 21 that will exclude life insurance and annuities in the final committee legislation. “By clarifying the definition of the ‘business of insurance,’ the Committee made clear that life insurance and annuities will not be within the jurisdiction of the new agency,” according to the Insured Retirement Institute (IRI).
Annuity products are currently regulated by the SEC, FINRA, and 50 state regulators. “Today’s action brings us one step closer to protecting consumers while allowing the industry to provide the best products in the most timely fashion,” said Cathy Weatherford, president and CEO of IRI. “We thank [House Financial Services Committee] Chairman Barney Frank and Congressmen Moore and Paulsen for their work to bring smart and effective consumer protections to the marketplace. We look forward to continuing to work with leaders on Capitol Hill as this legislation moves through Congress in the coming weeks.”
The House Financial Services Committee passed H.R. 3126, the Consumer Financial Protection Agency Act of 2009 a day later on October 22.
Treasury Secretary Timothy Geithner applauded the action saying in a prepared statement, “Today’s decisive action by the House Financial Services Committee, under the strong leadership of Chairman Frank, represents an important milestone in our efforts to reform the financial system. This bill will create one agency focused on one simple mission–protecting consumers. While there is more work ahead, today we are much closer to putting in place strict new rules of the road for the financial industry.”