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PIA Applauds Oxley-Baker Approach to Insurance Regulation

WASHINGTON, March 18, 2004 - The National Association of Professional Insurance Agents (PIA) today lauded the outline of a proposal on comprehensive insurance regulatory reform...
March 18, 2004

Proposal Calls for National Standards; Does Not Envision Federal Regulator or Optional Federal Charter

WASHINGTON, March 18, 2004 - The National Association of Professional Insurance Agents (PIA) today lauded the outline of a proposal on comprehensive insurance regulatory reform presented by House Financial Services Committee Chairman Michael G. Oxley (R-Ohio).

In a speech delivered March 14 at the winter meeting of the National Association of Insurance Commissioners (NAIC) in New York, Rep. Oxley outlined a sweeping regulatory proposal developed with Rep. Richard H. Baker (R-Louisiana), Chairman of the Capital Markets, Insurance and Government-Sponsored Enterprises Subcommittee. The proposal would modernize the current state-based regulatory system through enactment of federal standards and other federal tools, while preserving state-based regulation.

"PIA vigorously applauds the approach to insurance regulatory reform expressed by Chairman Oxley, which mirrors the approach first adopted by the PIA National Board of Directors in May 2000, and that PIA has advocated ever since," said PIA Senior Vice President Patricia A. Borowski. "Particularly because the approach presented by Chairman Oxley focuses on enacting the reforms needed to ensure modernization of the state-based system, and neither calls for the creation of a federal regulator, nor provides for an optional federal charter approach."

"PIA will remain engaged to ensure that the outline of what appears to be an excellent road map presented by Chairman Oxley does not get redrawn in a manner PIA opposes," Borowski said.

While the approach outlined by Reps. Oxley and Baker will likely form the basis of reform legislation at the federal level, its ultimate success will require cooperative efforts in state legislatures, noted PIA Assistant Vice President of Regulatory Affairs Ellen Sanders.

"Much coordination will be needed with the states," Sanders noted. "For instance, more reform is needed for nonresident insurance producer laws and nationwide rate and form changes. But to do so would require each jurisdiction to make changes in its own laws and then coordinate a federal standards mandate to keep the details on track."

"Federal legislation that seeks to encourage reform at the state level will have to be approached in a cooperative manner," noted PIA Assistant Vice President of Federal Affairs Peter Bizzozero. "The entire reform effort will require a tenacious focus. The approach PIA has advocated for the past four years - which Chairman Oxley and Rep. Baker support -- demands that the industry work cooperatively with both federal and state lawmakers and regulators, simultaneously. Not only is it doable, it is necessary."

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.