PIA National has issued a press release calling on Congress to remove a provision from financial services reform legislation that sets up an Office of National Insurance (ONI) in the Treasury Department. Lawmakers are preparing to consider the Restoring American Financial Stability Act of 2010 (S. 3217). As currently written, the bill creates an Office of National Insurance (ONI) within the Treasury Department that is overly broad in scope and that could undermine state-based insurance regulation, which has proven effective in largely insulating the insurance industry from the recent financial crisis.

“This is a federal government solution that – like many federal solutions – is being proposed for a problem that does not exist,” said PIA National Executive Vice President & CEO Leonard C. Brevik. “This federal insurance office is too expansive, too expensive and counterproductive.”

Inclusion of the ONI language renders S. 3217 inconsistent. While the bill purports to fix the many flaws in federal regulation of the banking and securities sectors, it creates a path to remove insurance from more stringent regulation by the states.

“The legislative language creating this office is written from the perspective that the federal government always knows best,” Brevik said. “PIA believes that when it comes to insurance, the federal government does not know best, the states do. Deficient federal regulation of banking and securities led to the financial crisis – while effective regulation of insurance by the states was successful.”

PIA Calls on Congress to Remove ONI From Financial Reform Bill (PIA 4/26/10)

April 28, 2010