WASHINGTON BUREAU — The Treasury Department believes any Federal Insurance Office legislation will let the FIO preempt state laws that conflict with international trade agreements on the sale of insurance.
Michael Barr, assistant secretary of the Treasury for financial institutions, gave that assessment Thursday here at an ALI-ABA Conference on Life Insurance Company Products.
“We firmly believe that with respect to international agreements on financial matter that there should be an appropriately tailored, narrow preemption provision associated with it so that, when there is a state law provision that is in conflict with an international trade agreement on discriminatory treatment of a foreign firm, there is a method for dealing with that,” Barr said.
But, in most cases, the FIO office would go through the National Association of Insurance Commissioners, Kansas City, Mo., when seeking information about insurers and the industry, Barr said.
The only exception would be when the FIO was seeking the information needed to assess the health of potentially systemically-risky insurers, he said. That information would be sought only from holding companies, not insurance subsidiaries, he added.
The FIO “is not a regulator in any sense,” Barr said. “It will have no examination authority.”
Congressional staffers and industry lobbyists have said in recent days that because of concerns raised by various parties, all preemption language in the FIO bill would be removed.
But “that is certainly not my understanding of what we proposed, and it is not my understanding what the House Financial Services Committee intends to do,” Barr said.
Barr said that is also not his understanding as to what the U.S. Trade Representative and House Ways and Means Committee leaders want.