You are here:HomeIssuesProtecting State Insurance Regulation 2003Sen. Hollings Introduces Bill to Create Federal Regulation of Insurance

Sen. Hollings Introduces Bill to Create Federal Regulation of Insurance

Senator Ernest "Fritz" Hollings (D-South Carolina) has introduced legislation that would create federal regulation of insurance. Hollings' bill, S. 1373, The InsuranceConsumer Protection Act of...
July 15, 2003

Senator Ernest "Fritz" Hollings (D-South Carolina) has introduced legislation that would create federal 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 Antitrust exemption under the McCarran-Ferguson Act would be repealed, and the new system would not be optional. Only carriers doing business solely in the state they are domiciled would be state-regulated. The new Federal Insurance Commission would regulate all lines of insurance. S. 1373 has been referred to the Senate Committee on Commerce, Science and Transportation.

What It Means to Agents:  PIA is on record in opposition to a federalized insurance oversight system, optional federal charters, a dual regulatory system and/or a state-only system that has each state "doing their own unique thing." Rather, PIA supports state-based functional regulation of insurance that balances the need for national uniformity in standards and the demands of emerging multi-state markets, within the framework of functional state regulation. This PIA-preferred approach maintains functional state regulation of insurance while at the same time advancing needed modernization in insurance regulation.

S. 1373 appears to be a federalization attempt that still leaves the door open to insurance competitors also being equally regulated by their state of domicile-the worst and most confusing of all worlds for producers and insurers alike! As a consequence, PIA is opposed to S. 1373, and will vigorously oppose this proposed legislation.