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Life Health > Health Insurance

H.R. 4173: HHS Could Get Jurisdiction Over LTC Insurance (Corrected, Updated)

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WASHINGTON BUREAU — The U.S. Department of Health and Human Services may get the authority to handle long term care insurance issues — and could possibly get to study the idea of a federal role in LTC insurance regulation.

The conference committee responsible for reconciling the House and Senate versions of H.R. 4173 – the big financial services bill – agreed Tuesday to add an LTC insurance amendment to Title V of the bill.

The amendment would affect the scope of the authority of a Federal Insurance Office that would be created at the U.S. Treasury Department.

The amendment would give HHS the authority to handle stand-alone LTC insurance products as well as health insurance products, and the authority to work with the proposed FIO to coordinate work on the LTC features included in life and annuity products. If the FIO ends up with the authority to look for gaps in the current state-based U.S. insurance regulatory system and recommend changes, HHS might get parallel authority to study a variety of health insurance and LTC insurance issues, including regulation of health and LTC products.

The “base conference text” version of the FIO provision would give the FIO the authority to identify “issues or gaps in the regulation” in the insurance sectors it oversees that could contribute to financial-system-threatening problems, and the Treasury secretary could assign the office additional responsibilities.

The HHS LTC jurisdiction amendment was proposed by House Energy and Commerce Committee Chairman Henry Waxman, D-Calif. Conferees approved the amendment by a voice vote.

Waxman says HHS “is the primary agency with expertise and experience in the area of long term care” and should take the lead in studying LTC insurance issues.

The FIO and HHS should work together to develop “the best recommendations and advice for the future of these types of products,” Waxman says.

By putting responsibility for LTC insurance products in the hands of HHS officials, the LTC amendment would give the House Energy and Commerce Committee a chance to get involved with studies of issues related to LTC products.

The conference committee is continuing to work on H.R. 4173 today, but it is putting off final action on Title V while congressional staffers propose compromises on sections of the title other than the LTC jurisdiction provision.

Jack Dolan, a staffer at the American Council of Life Insurers, Washington, says lawmakers seem to be confusing LTC insurance with health insurance.

“The amendment demonstrates the lack of knowledge on the Hill of our products,” Dolan says.



Earlier versions of this article described the proposed role of HHS in connection with LTC insurance incorrectly. The Waxman amendment would give HHS, rather than the proposed Federal Insurance Office, the authority to handle LTC insurance issues in general; the amendment does not explicitly state whether HHS would conduct studies and does not indicate whether HHS would look at LTC insurance jurisdiction matters. We regret the error.




On page 2 of the House Offer, strike the instruction relating to page 475, lines 17 and 18 of the Conference Base Text, and insert the following:

Page 475, strike lines 16 through 21 and insert the following:

“(d) SCOPE — The authority of the [FIO] shall extend to all lines of insurance except –

“(1) health insurance, as determined by the Secretary [of the Treasury] in coordination with the Secretary of Health and Human Services based on section 2791 of the Public Health Service Act (42 U.S.C. 300gg-91);

“(2) long-term care insurance, except long-term care insurance that is included with life or annuity insurance components, as determined by the Secretary in coordination with the Secretary of Health and Human Services, and in the case of long-term care insurance that is included with such components the Secretary shall coordinate with the Secretary of Health and Human Services in performing the functions of the Office; and

“(3) crop insurance, as established by the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).”.


An excerpt from Page 475 of the Base Conference Text, which deals with creating a Federal Insurance Office or Office of National Insurance at the Treasury Department:


”(a) ESTABLISHMENT.–There is established within the Department of the Treasury the Office of National Insurance.


”(1) AUTHORITY PURSUANT TO DIRECTION OF SECRETARY.–The Office, pursuant to the direction of the Secretary, shall have the authority–

”(A) to monitor all aspects of the insurce industry, including identifying issues or gaps in the regulation of insurers that could contribute to a systemic crisis in the insurance industry or the United States financial system;

”(B) to monitor the extent to which traditionally underserved communities and consumers, minorities (as such term is defined in section 1204(c) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 note)), and low-and moderate-income persons have access to affordable insurance products regarding all lines of insurance, except health insurance;

”(C) to recommend to the Financial Stability Oversight Council that it designate an insurer, including the affiliates of such insurer, as an entity subject to regulation as a nonbank financial company supervised by the Board of Governors pursuant to title I of the Restoring American Financial Stability Act of 2010;

”(D) to assist the Secretary in administering the Terrorism Insurance Program established in the Department of the Treasury under the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note);

”(E) to coordinate Federal efforts and develop Federal policy on prudential aspects of international insurance matters, including representing the United States, as appropriate, in the International Association of Insurance Supervisors (or a successor entity) and assisting the Secretary in negotiating International In surance Agreements on Prudential Measures;

”(F) to determine, in accordance with subsection (f), whether State insurance measures are preempted by International Insurance Agreements on Prudential Measures;

”(G) to consult with the States (including State insurance regulators) regarding insurance matters of national importance and prudential insurance matters of international importance; and

”(H) to perform such other related duties and authorities as may be assigned to the Office by the Secretary.

”(2) ADVISORY FUNCTIONS.–The Office shall advise the Secretary on major domestic and prudential international insurance policy issues.

”(d) SCOPE.–The authority of the Office shall extend to all lines of insurance except health insurance, as such insurance is determined by the Secretary based on section 2791 of the Public Health Service Act (42 U.S.C. 300gg-91), and crop insurance, as established by the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).


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