Groups Line Up For Senate Insurance Hearing

Jul 28, 2008

National Underwriter–July 25, 2008


WASHINGTON —State insurance regulators and industry trade groups are set to testify Tuesday when the Senate Banking Committee holds a hearing on the “state of the nation’s insurance industry.”

Representatives of the National Association of Insurance Commissioners and the American Insurance Association will be among groups appearing that include consumer representatives.

According to Sen. Chris Dodd, D-Conn., chairman of the committee, witnesses will testify on the current state of insurance regulation and oversight.

Those appearing before the committee are also expected to address ways to promote competition and efficiency in the U.S. insurance marketplace, and how to enhance consumer protection, Sen. Dodd said.

Besides the AIA and NAIC, a representative of the Consumer Federation of America will testify on the first panel.

The second panel will include representatives of the Council of Insurance Agents and Brokers, the National Association of Professional Surplus Lines Offices, Ltd., the Independent Insurance Agents and Brokers of America and the Reinsurance Association of America.

The hearing could constitute a potential breakthrough on enactment of legislation this year reforming the surplus lines industry.

The bill is H.R. 1065, the Nonadmitted and Reinsurance Reform Act, which passed the House of Representatives overwhelmingly in 2007.

Other issues are unlikely to fare as well. According to industry representatives, the hearing is likely to represent the venting of the well-marked divides over federal-versus-state battle that has raged for years.

Numerous sources on the Hill and within industry say the hearings may well set the stage for the enactment of reforms in the next Congress that might either buck up state insurance regulation or undermine it, depending on one’s perspective.

Several insurance bills have been introduced in the Senate in the current Congress, including legislation that would create an optional federal charter, but the only action so far in the Senate has been on legislation reauthorizing and reforming the National Flood Insurance Program.

That program must be reauthorized by Sept. 30, the end of the current government fiscal year.

Congress did enact late last year legislation extending the Terrorism Risk Insurance Act.

By contrast, besides flood insurance legislation, the House Financial Services Committee recently reported out legislation creating an Office of Insurance Information within the Treasury Department, as well as bills recreating the National Association of Insurance Agents and Brokers and expanding the Risk Retention Act to include property as well as liability insurance.

The Insurance Information Act, or H.R. 5840, and the National Association of Registered Agents and Brokers Reform Act, also known as H.R. 5611, are expected to be taken up by the full House next month. They were reported out of the Capital Markets Subcommittee of the House Financial Services Committee July 9.

Action on another bill passed by the House panel July 9, the Increasing Insurance Coverage Options for Consumers Act, or HR 5792, is expected to be delayed because it must be acted on by another House committee before it can be cleared for floor action.