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State Regulators Support Changes to Federal Insurance Office Act

Source: NAIC

Posted on 20 Nov 2009

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Changes to proposed legislation creating a Federal Insurance Office (FIO) have earned support from state insurance regulators. In a letter, the National Association of Insurance Commissioners (NAIC) told the House Financial Services Committee that amendments to the Federal Insurance Office Act (H.R. 2609) uphold important safeguards to ensure state regulation continues to protect insurance consumers and companies.

"The recent amendments strike an appropriate balance among the needs of consumers, state regulators and federal negotiators by preserving important state and market regulation while allowing for agreements with equivalent regulatory systems,” said Roger Sevigny, NAIC President and New Hampshire Insurance Commissioner. “While the NAIC continues to oppose a federal functional regulator for insurance or misguided attempts to further empower the FIO, the bill as currently drafted is an appropriately narrow and targeted improvement to our system of supervision.”

The NAIC supports changes to the bill that include:

* Close coordination between the states and the FIO on narrow international agreements

* Ensuring that international agreements do not preempt state prudential regulation of U.S. insurers * Limiting the scope of agreements to recognizing a level of supervision consistent with state protections

* Enhanced Congressional involvement and consultation, and improved judicial review on preemptive determinations

* A clear retention of state authority over the business of insurance

The original bill was introduced in May by Congressman Paul E. Kanjorski, (D-Pa.) and Congresswoman Judy Biggert (R-Ill) to establish, what would be, a Federal Insurance Office in the Treasury Department. The office will be charged with the collection of insurance data to advise Treasury on domestic and international policy issues, report to Congress every two years and create federal policies related to international insurance issues.