When H.R. 5840, the innocuous-sounding Insurance Information Act of 2008, was introduced earlier this year, its supporters said it was simply an effort to create an information resource for members of Congress on insurance matters.
As the drafting process proceeded, the Treasury Secretary’s powers were expanded, giving him authority to preempt state insurance laws, regulations and practices not only when he says they conflict with international agreements, but also when he says they conflict with “national insurance policy” set by the Treasury Department.
By the time that the House Capital Markets Subcommittee approved H.R. 5840 on July 8, 2008, the bill had been transformed into legislation that would enable a federal takeover of most insurance regulation:
- Under H.R. 5840, Congress grants new powers to the Secretary of the Treasury, making the Secretary the principal federal authority for domestic and international insurance issues of national interest with the power to determine which state laws, regulations and industry practices will be preempted.
- H.R. 5840 effectively guts the McCarran-Ferguson Act of 1945 and the Gramm-Leach-Bliley Act of 1999, which establish and affirm that the states are the regulators of the business of insurance.
What It Means to Agents: If you’ve ever wondered how the advocates of federal regulation of insurance would attempt to get their ideas through Congress, you don’t need to wonder any longer. Here is it. H.R. 5840, with its purposely misleading title, is an expansive bill enabling federal regulation of insurance.
PIA is a steadfast supporter of a modern state system of insurance regulation. PIA opposes federal regulation of insurance and consequently, PIA vehemently opposes H.R. 5840.
PIA’s Auerbach to NCOIL: PIA Steadfast in Support of State Regulation
July 22, 2008