NAIC Wins FIO Bill Changes

The Financial Services Committee might mark up the FSIA bill Thursday, but the controversy over the FIO provision changes could lead to a delay.

The changes the NAIC negotiated in the bill would mandate closer cooperation between the states and the FIO on narrow international agreements; ensure that international agreements would not preempt state prudential regulation of U.S. insurers; limit the scope of agreements to recognizing a level of supervision consistent with state protections; add a congressional involvement and consultation provision; and add a provision requiring judicial review of preemptive determinations made by the proposed agency.

The changed language also would restate that states have the authority to regulate the “business of insurance.”

“The recent amendments strike an appropriate balance among the needs of consumers, state regulators and federal negotiators by preserving important state and market regulation while allowing for agreements with equivalent regulatory systems,” Roger Sevigny, NAIC president and New Hampshire insurance commissioner, says in a statement. “While the NAIC continues to oppose a federal functional regulator for insurance or misguided attempts to further empower the FIO, the bill as currently drafted is an appropriately narrow and targeted improvement to our system of supervision.”

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For more information about the FIO bill, see the following articles:

• Barr: Preemption Still In FIO Proposal
• Ways And Means Seeks Insurance Office Bill Role