In a resolution adopted by at the group's annual spring meeting in Charleston, S.C., NCOIL recommended the Senate Banking Committee exclude the industry from systemic risk regulation, federal resolution authority and assessments to fund the resolution of systemically risky financial entities. NCOIL supports coordination and data-sharing between state and federal regulators, but there is no reason for any new or existing federal entity to gain new oversight over insurance, NCOIL President and Kentucky Rep. Robert Damron, a co-sponsor of the resolution, said in a statement.
"We have seen little evidence that insurance companies or their regulation contributed to the nation's financial crisis and we do not believe that Congress should enact insurance reforms simply because members believe that they can," he said.
Property/casualty insurers, in particular, have argued against their inclusion in a final Senate bill. A coalition of 11 major insurance companies recently sent a letter to Sen. Chris Dodd, D-Conn., chairman of the Banking, Housing and Urban Development Committee, to argue against their inclusion. Their argument deals specifically with the component of the pending bill that will deal with systemic risk -- large financial institutions that have the scale and reach to cause major damage to the U.S. economy if they fail.
NCOIL membership also approved a resolution restating the group's opposition to a new federal insurance office. Sponsored by Committee Chairman and Alabama Rep. Greg Wren, it specifically criticized a bill under consideration in the Senate Banking Committee. The proposed Office of National Insurance would be allowed to "duplicate and interfere with state insurance regulation, impose burdensome and unnecessary data requests on insurers through subpoena, and pre-empt state solvency regulation," according to the resolution.
The National Association of Insurance Commissioners supports a similar bill passed by the House Financial Services Committee.