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PIA Vows Aggressive Opposition to Hollings Bill to Federalize Insurance Regulation

WASHINGTON, July 18, 2003 - The National Association of Professional Insurance Agents (PIA) will actively oppose legislation introduced by Sen. Ernest "Fritz" Hollings (D-South Carolina)...
July 18, 2003

Borowski Says Hollings Bill One of Worst Proposals Advanced

WASHINGTON, July 18, 2003 - The National Association of Professional Insurance Agents (PIA) will actively oppose legislation introduced by Sen. Ernest "Fritz" Hollings (D-South Carolina) that would federalize the regulation of insurance.

Hollings' bill S. 1373, "The InsuranceConsumer Protection Act of 2003," would create in the Commerce Department a five-member Federal Insurance Commission that would establish standards, regulate rates and policies, investigate market conduct and oversee solvency. Antitrust exemption under the McCarran-Ferguson Act would be repealed under the bill, and the new regulatory system would not be optional. The new Federal Insurance Commission would regulate all lines of insuranceexcept carriers doing business solely in the state where they are domiciled, workers comp and state residual workers comp pools.

"PIA's position is clear and unambiguous - we believe in state-based functional regulation of insurance," said PIA Senior Vice President of Government Affairs Patricia A. Borowski. "The proposal put forth by Senator Hollings is unworkable, ill-advised and not in the best interests of insurance producers or the consumers it purports to protect by federalizing regulation and moving consumer protection further away from consumers."

PIA will continue to strongly oppose federalized insurance oversight proposals, regardless of whether such oversight is based on concepts of optional federal charters or a duplicative state-federal regulatory system.

"PIA supports state-based functional regulation of insurance as embraced by the National Association of Insurance Commissioners (NAIC), established under McCarran-Ferguson and added to by Gramm-Leach-Bliley (GLBA)," Borowski said. "Congress realizes this must be a cooperative venture, not one that mires everyone in conflict. State and federal agencies along with the NAIC have already invested millions of dollars in cooperative reforms required by GLBA, which mandate states take the lead in collaborative efforts to effect modernization. That is not the framework the Hollings bill envisions. S. 1373 would not only replace the current evolving system, it would eviscerate the significant investment already made in reforming that system."

"This is probably one of the worst insurance regulatory proposals advanced thus far," declared Borowski. "As a consequence, PIA is opposed to S. 1373 and will vigorously oppose it."

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses.