Over the next several weeks, PIA National will be engaging on several fronts in support of the positions that PIA members have adopted on issues of importance to agents.

Sometime between now and the end of the month, the U.S. Treasury Department will come out with some interim recommendations following their biased survey of financial regulation in insurance. You will recall that PIA registered strong objections to the tenor and tone of this survey when Treasury produced what we believe were clearly “loaded questions” indicating they were trying to encourage support for federal insurance regulation.

Of course, Treasury won’t be deterred by PIA pointing out this fact. It has announced that it will issue its proposals before March 31. Already, some members of Congress who do the bidding for the big firms (and whose campaign finance reports indicate this) are pushing this (see previous item). It is possible that Treasury will call for an Optional Federal Charter. PIA will respond in opposition. It is also fortunate that NAIC, NCOIL and NCSL have restated their opposition forcefully, as has PIA.

After the Treasury issues its report, the focus will shift back to Capitol Hill in April, when more hearings on financial services modernization will be held by the House Financial Services Committee.

What It Means to Agents:  Banks, equity firms and international financial service conglomerates that also have insurance operations are pressing their case full steam ahead. While it is not likely that Congress will have time to act on Treasury’s recommendation this year, the OFC fans, including ACLI and other insurance interests, will at least have a “founding” U.S. Treasury Report to point to in the next Congress. 

PIA has and continues to oppose federal pre-emption and/or a dual federal insurance oversight system (to that of the states). 

The “vision” that is being advanced of a future global, open, “no-borders” U.S. insurance marketplace does not pay attention to assuring a fair, equitable and balanced insurance marketplace for all sizes and forms of insurance competitors, or providing markets to all segment and regions of the U.S. population. PIA’s vision, on the other hand, does!

Further, in any area of commerce, it is the nature of the federal government (one they regularly exercise) that when they’re given a bit of a direct hold by Congress over any form of commerce that they keep expanding and leveraging that small toehold in order to gain more direct authority, control and oversight of that area of commerce -- despite whether there are established state authorities overseeing the area. 

Just look at the more recent Office of the Comptroller of the Currency (OCC) declaration that federally regulated banks were no longer subject to state banking consumer protection laws, but rather solely responsible to OCC and their federally-issued regulations, because state law interfered with the business of banking for their federal entities. By the by, with all the objections by state banking commissioners, state AGs and Members of Congress, Congress failed to pass a bill that would have pushed OCC back.  Or a bill addressing the 2006 U. S. Supreme Court decision in Wachovia, that pushed out state authorities’ oversight of mortgage brokering operations that become attached to federally regulated banks.

So, beware the Ides of March – and get ready for an interesting ride, and increased internal PIA leadership policy discussions and statements.

March 12, 2008