Opposition to the Insurance Information Act of 2008 (H.R. 5840) continues to build.

Maine Superintendent of Insurance Mila Kofman said in a letter also signed by Maine Attorney General G. Steven Rowe that H.R. 5840 could “fundamentally erode” state insurance regulation. “In addition to our concerns about OII being the first step to federal deregulation of insurance, we believe that H.R. 5840 could significantly hamper state insurance regulators’ ability to continue to protect its insurance consumers and private markets,” Kofman wrote.

“The Office of Insurance Information (OII), which would be established by the bill, and the mechanism for preemption of state laws under H.R. 5840, closely track a concept outlined in The Department of the Treasury Blueprint for a Modernized Financial Regulatory Structure. The Blueprint states:

Treasury recommends establishing an optional federal charter (“OFC”) for insurers.... Treasury recommends that Congress establish an Office of Insurance Oversight (“OIO”) within Treasury.... Once Congress passes significant insurance regulatory reform, the OIO could be incorporated into the OFC framework.” (Blueprint page 16)

“Similarly, at the markup session, comments were made by some Members supporting the OII as a first step toward a federal charter. Whether the office is called ‘Oversight’ or ‘Information’ becomes less important given the new office’s broad authority over international agreements and preemption issues, “ Kofman added.

“For over 150 years, states have been the primary regulators of insurance, protecting consumers, encouraging private market competition, and helping to ensure that affordable and accessible insurance products are available. These steps to federalize insurance regulation – in other words to deregulate – will have an adverse impact on consumers of insurance and the private market,” concluded Kofman.

Maine Superintendent Kofman & AG Rowe’s Letter to Congress (7/22/08)

September 3, 2008