In an August 1 letter to Senate Committee on Banking, Housing, and Urban Affairs Chairman Sen. Chris Dodd (D-Conn.), National Conference of Insurance Legislators (NCOIL) leaders spoke out against Congressional efforts to fast-track legislation to create a federal Office of Insurance Information (OII)—recommending that their federal colleagues slow down the legislative process for further debate and discussion. The letter followed in the wake of a July 29 hearing during which Sen. Dodd signaled that the Senate could consider a legislative package that may include parts of H.R. 5840, the Insurance Information Act of 2008, before adjourning in September.
“We do not understand the impetus behind moving legislation in such an expeditious manner that would substantially affect the governance of insurance regulation,” said NCOIL President Brian Kennedy in the letter. “There is no crisis in the insurance industry that would justify such swift Congressional action—as evidenced by the industry’s record profits. The insurance marketplace, unlike federally regulated banking institutions and markets, is well-regulated at the State level to protect consumers while providing a competitive environment for companies and investors.”
The letter—which was distributed to every U.S. Senator—urged members not to pursue an even faster track on such a controversial piece of legislation than the path pursued in the House and stated:
“H.R. 5840 is a new proposal in the Senate—though introduced and advanced in the United States House of Representatives in 2008—and has not been vetted in the Senate or debated by any previous Congress. The measure was reported out of the House Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises after a markup in which less than 15 of the almost-50 member Subcommittee voted. Even more troubling, the House Committee on Financial Services has yet to debate H.R. 5840.”
NCOIL leaders also requested that Sen. Dodd “not bundle H.R. 5840 with other insurance-related bills, including a bill to address the surplus lines market.” NCOIL believes that Congress should consider separately the merits of each piece of legislation, instead of grouping several bills into one insurance package.
“We believe that the OII would establish a framework that a future Congress could build upon to create and empower a federal insurance regulator, contrary to the original legislative intent,” the letter states. “We also respectfully note that co-sponsors of OFC legislation H.R. 3200, the National Insurance Act, have publicly stated that H.R. 5840 would be a step toward that end.”
“NCOIL believes that H.R. 5840 will undermine consumer protections embedded in the state-based system and may prove detrimental to what is now a thriving insurance marketplace,” the NCOIL letter continues. “We recommend that you do not attempt to fast-track the bill—which has neither been introduced nor debated in the Senate. We further advise that to combine the bill with other legislation in this 110th Congress would further muddy the waters.”
State Legislators Reject Congressional Calls for OII (NCOIL 8/7/08)
NCOIL Asks Senate to Block OII Bill (National Underwriter 8/7/08)
NCOIL’s Letter to Banking Committee Chairman Dodd (8/1/08)
August 12, 2008