Members of the U.S. House today passed H.R. 4537, an international insurance standards talks bill that has pushed property-casualty insurer groups away from life insurer groups, by a voice vote.
House leaders put H.R. 4537, the “International Insurance Standards Act of 2017″ bill, on a list of bills with such broad support that they can be considered without using the usual House rules. House members debated the bill for about 40 minutes, passed the bill, then rejected a motion calling for the House to hold a recorded vote on the measure.
Because the House passed the bill by a voice vote, no vote tally is available.
Members of the House Financial Services Committee approved the bill by a 56-4 vote in December.
If implemented as written, the bill would:
- Require international insurance standards negotiators to seek standards deals that conform with existing federal and state laws and regulations.
- Require negotiators to consult with state insurance commissioners and Congress before making insurance standards deals.
- Give Congress a process for rejecting international insurance standards deals.
The procedures and rules described in the bill would apply only to insurance standards efforts, not to “any forum or negotiations related to a trade agreement.”
The bill was introduced by Rep. Sean Duffy, R-Wis., and Rep. Denny Heck, D-Wash.
The Property Casualty Insurers Association of America (PCI) and the National Association of Mutual Insurance Companies (NAMIC) both support the bill.
Nat Wienecke, a senior vice president at PCI, said in a statement Monday that the bill supports the state-based nature of the U.S. insurance regulation system.
The bill “recognizes the appropriate role of state insurance regulators in developing international insurance standards and provides that Congress receives appropriate notice to exercise its oversight over such negotiations, Wienecke said.
NAMIC said in March that it fears the effects of poorly written international standards on member insurers.
“NAMIC has long expressed concern that negotiations at the International Association of Insurance Supervisors aimed at creating regulatory uniformity across global borders could conflict with and undermine the regulatory structure that has served U.S. consumers for more than 150 years,” the group said in a statement.
The American Council of Life Insurers (ACLI) has joined with the Reinsurance Association of America (RAA) — a group that represents both life and P&C reinsurers — to oppose the bill.
The ACLI and RAA said in a letter sent to Duffy and Heck last week that they respect the state-based U.S. insurance regulatory system but believe the proposed H.R. 4537 restrictions on U.S. standards negotiators would be too rigid.
“We believe, if enacted, the bill would hinder the U.S. industry’s ability to compete internationally and protect itself from future threats,” the ACLI and RAA said, according to a copy of the letter provided by Rep. Ed Royce, R-Calif. “We look forward to continuing to work with you on a bill that our associations can support.”
Royce, a lawmaker who is retiring at the end of the year, has long argued that state insurance regulators have no good mechanism they can use to coordinate their activities quickly.
Royce has also argued that state insurance regulator efforts to use the National Association of Insurance Commissioners to coordinate their activities give the NAIC — a group for insurance regulators — more ability to shape insurance rules than a private corporation should have.
Royce said in a statement released Monday that H.R. 4537 is unconstitutional and anti-competitive.
Supporters of the bill, including many state insurance regulators, “appear more interested in winning an imaginary turf war than in acting in the best interests of U.S. consumers,” Royce said. “Fifty-plus state regulators and their trade association simply do not have the authority or capacity to engage in international negotiations in a global economy.”
Congress should instead work to help the Federal Insurance Office, an agency created by the Dodd-Frank Act, provide a strong, consistent U.S. voice in international insurance arenas, Royce said.
“H.R. 4537 does the opposite; undermining our ability to work and act together internationally to promote and defend the U.S. system of insurance regulation,” Royce said.
— Read Royce Defends FIO, Questions NAIC’s Credibility, on ThinkAdvisor.