Posted on 18 Dec 2009
The American Insurance Association (AIA) has identified regulatory reform as the top issue for the 2010 Congressional session for the property-casualty industry.
Last week, the U.S. House of Representatives approved the Wall Street Reform and Consumer Protection Act of 2009. The measure now moves to the Senate and will likely be addressed by the Senate Banking Committee when Congress returns from their holiday recess.
Among the issues being considered by the Senate will be the creation of the Federal Office of Insurance (FIO), the Consumer Financial Protection Agency (CFPA), systemic risk supervision and resolution authority, corporate governance, derivatives, credit rating agencies, and investor protections.
“Our priorities will remain focused on ensuring that the unique nature of the property-casualty industry is recognized in the reforms being considered in Congress,” said Leigh Ann Pusey, president and CEO of the AIA. “Specifically, we will be working on how any new heightened prudential supervision standards would impact insurance companies and the treatment of insurers in any accompanying resolution authority provisions.”
“In any of the reforms being considered, policymakers need to account for the level of risk our industry poses to the broader financial system, the nature of our business and regulatory standards, and our existing resolution and guaranty processes,” added Pusey.
In the House chamber, AIA will continue to work with the Financial Services Committee as the final reform package goes into negotiations in conference with the Senate version. Having completed its primary work on broader financial reform, the House Committee will turn its attention to insurance reform where Chairman Frank has indicated the Committee will hold legislative hearings that address the establishment of an Optional Federal Charter for insurance companies.
"The current state-based insurance regulatory system is not well-suited to bridge information or regulatory gaps that may arise in today’s complex and global economy,” continued Pusey. “AIA believes regulatory modernization is needed in the wake of the financial crisis and we look forward to working with Congressional leaders to enact legislation that will provide a pathway towards a safe, healthy and competitive insurance marketplace.”
Other legislative issues for the 2010 legislative agenda include reauthorization of the National Flood Insurance Program, stronger building codes and mitigation related legislation, the Federal highway program reauthorization (SAFETEA-LU), and other safety-related issues like distracted driving bans and graduated licensing.
“It is essential that programs like the National Flood Program and Federal highway program be reauthorized,” concluded Ms. Pusey. “AIA has been a strong proponent of comprehensive flood insurance reform and our industry has made great strides in protecting policyholders and ensuring that our nation’s roadways continue to reduce accidents and deaths, but more must be done. We look forward to working with Congress on these and other issues.”