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Insurance Exempted From Consumer Financial Protection Agency

An amendment stripping oversight of insurance has been included in a bill that would establish a new Consumer Financial Protection Agency. The bill (H.R. 3126)...
October 27, 2009

An amendment stripping oversight of insurance has been included in a bill that would establish a new Consumer Financial Protection Agency. The bill (H.R. 3126) was then passed 39-29 by the House Financial Services Committee on October 22. Companion legislation has yet to be introduced in the Senate.

The amendment excepting the business of insurance from the bill was offered by Rep. Gwen Moore (D-Wis.). The adopted amendment addressed the definition of "financial activity" and specified that it should not include the business of insurance. In her public statements, the congresswoman recognized the importance of state regulation of insurance and that an additional federal regulatory layer would provide no benefit to consumers.

The amendment struck the mention of the mortgage, title and credit insurers and redefined the exclusion for the business of insurance. It eliminated any writing of insurance or the "activities relating to the writing of insurance or the reinsuring of risks" conducted by insurance employees. The four-page amendment, championed on the other side of the aisle by Rep. Erik Paulsen (R-Minn.) also inserted a specific exclusion for those regulated by state insurance regulators.

"The passage of this amendment eliminating insurance from the jurisdiction of a proposed new federal agency is good news for carriers, agents and consumers," said PIA National President Jon Spalding. "It is also another indication that in the marketplace of ideas on Capitol Hill, our position that the federal government should not interfere in the business of insurance or co-opt our state regulators is continuing to be persuasive."

P/C Insurers Look to Avoid Federal Agency (Insurance Journal 10/23/09)