National Conference of Insurance Legislators (NCOIL) President Rep. Brian Patrick Kennedy (RI) expressed concern today regarding H.R. 5840, the Insurance Information Act of 2008—legislation introduced late last week by Congressman Paul Kanjorski (D-PA), chairman of the U.S. House Capital Markets Subcommittee—creating a new federal insurance office and in effect preempting long-established state structures.    

The NCOIL President said , “Instead of ‘tilting at windmills’ and laying the foundation for untried federal approaches like an Office of National Insurance (ONI) and an optional federal charter (OFC), we are hoping that Chairman Kanjorski will look to the many state-based successes, such as the Interstate Insurance Product Regulation Compact. With 31 member jurisdictions, and many other states considering passing the necessary legislation to join, the Compact has proven itself a model for insurance reform.”

“We understand and share many of the chairman’s concerns regarding insurance regulation,” Kennedy said. “States are working individually and collectively to modernize and streamline regulation, where appropriate, to make certain that insurance companies continue to thrive while protecting the interests of consumers, policyholders and investors.  We believe that the primary authority to oversee the insurance industry must remain with the states—states who for 150 years have maintained a strong track record regarding insurance regulation.”

“NCOIL questions what the future would hold for successful state mechanisms—including the National Insurance Producer Registry (NIPR) and the National Association of Insurance Commissioners (NAIC) accreditation program for financial solvency—after a federal insurance office is established in Washington, DC,” Rep. Kennedy said.    

Rep. Kennedy said, “None of my constituents has ever called, emailed or even verbally communicated to me that the insurance industry is broken and that the best approach to reform is an Office of Insurance Information. Congress should think carefully before wielding a big stick approach to solving a problem that merely needs tinkering.”

NCOIL Urges Long-Term State Solutions Over Federal Quick-Fixes (NCOIL 4/21/08, Word document)

April 22, 2008