WASHINGTON BUREAU — Sen. Jeffrey Merkley has introduced one amendment to S. 3217 – the financial services bill now on the Senate floor – that would narrow the authority of a proposed Office of National Insurance, and another that would affect proprietary trading activities.
The ONI section of S. 3217, the Restoring Financial Stability Act, would create an ONI at the U.S. Treasury Department that would gather information about the insurance industry and help the Treasury Department handle international trade agreements that involve insurance.
Lawmakers are in the process of debating a handful of the scores of S. 3217 amendments that their colleagues have filed. It is not clear how many the Senate will consider before voting on the underlying bill.
The House already has approved a major financial services bill, H.R. 4173, the Wall Street Reform and Consumer Protection Act.
The new ONI amendment that Merkley, D-Ore., has filed, S.A. 3922, would limit the authority of the ONI to preempt state insurance laws and regulations that conflict with bilateral trade agreements.
S.A. 3922 would let the ONI preempt state insurance rules over trade agreement conflicts only when the state insurance rules treated non-U.S. insurers less favorably than U.S. insurers.
The initial amendment cosponsors of S.A. 3922 are Sens. Sherrod Brown, D-Ohio; Barbara Boxer, D-Calif.; Russ Feingold, D-Wis.; Olympia Snowe, R-Maine; and Bernard Sanders, I-Vermont.
The amendment would require the ONI to consider the effect of preemption on consumer protection; on the safety and soundness of the U.S. insurance markets; and on the comprehensiveness of state financial and market conduct regulation.
The amendment would let states appeal preemption decisions to the federal courts.
Any ONI preemption action would be subject to a notice and comment period under the federal Administrative Procedures Act.
The amendment would transfer authority to conduct a study of how current insurance laws could be updated from the ONI and the Treasury Department to the U.S. Government Accountability Office.