Merkley S. 3217 Amendment Would Leash Insurance Office

The National Association of Mutual Insurance Companies, Indianapolis, and the Property Casualty Insurers Association of America, Des Plaines, Ill., are supporting the amendment, according to an official at a unit of Cincinnati Financial Corp., Cincinnati (Nasdaq:CINF).

The National Conference of State Legislators, Troy, N.Y., has written a letter supporting the amendment to every member of Congress, suggesting that the amendment would narrow the scope of the proposed ONI in a way that would weaken the opportunity for “mission creep.”

Eight insurance groups are opposing S.A. 3922 and encouraging senators to keep the current S. 3217 ONI language.

S.A. 3922 “would substantially weaken the Office of National Insurance’s power to address international issues that are critical to U.S. companies, and ultimately to U.S. consumers,” the groups write in the letter.

The groups signing the letter are the American Insurance Association, Washington; the Financial Services Roundtable, Washington; the Council of Insurance Agents & Brokers, Washington; the Association of Bermuda Insurers & Reinsurers, Hamilton, Bermuda; the European Insurance and Reinsurance Federation, Brussels; the American Bankers Insurance Association, Washington; the Risk and Insurance Management Society Inc., New York; the American Council of Life Insurers, Washington; and the Reinsurance Association of America, Washington.

Merkley also has teamed with Sen. Carl Levin, D-Mich., to introduce S.A. 3931, an amendment that could affect life insurers’ proprietary trading operations.

The authors of the bill are trying to impose tight restrictions on financial services companies’ ability to invest in hedge funds and private equity funds.

Merkley and Brown include a provision that would let regulators tailor the provision to “appropriately accommodate the business of insurance within an insurance company subject to regulation in accordance with the relevant insurance company investment laws while protecting the safety and soundness of an affiliated insured depository institution and the United States financial system,” according to the amendment text.

The ACLI believes the provision “would provide a very narrow exemption from proprietary trading restrictions for life insurers,” ACLI representative Jack Dolan says.

But “broad relief is needed and appropriate so we can continue serving our customers in the best way possible,” Dolan says.

Besides Merkley and Levin, S.A. 3931 is sponsored by Sherrod Brown, D-Ohio; Ted Kaufman, D-Del.; Jeanne Shaheen, D-N.H.; Dianne Feinstein, D-Calif.; Robert Casey, D-Pa.; Bill Nelson, D-Fla.; Roland Burris, D-Ill.; Mark Begich, D-Alaska; Daniel Inouye, D-Hawaii; Sheldon Whitehouse, D-R.I.; Claire McCaskill, D-Missouri; Mark Udall, D-Colo.; Barbara Mikulski, D-Md.; Bernard Sanders, I-Vermont; Tom Udall, D-N.M.; and Jack Reed, D-R.I.