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NAIC Gives FIO Bill Qualified Endorsement After Securing Changes

The National Association of Insurance Commissioners (NAIC) announced its qualified support for the Federal Insurance Office Act of 2009 (H.R. 2609) after successfully advocating for...
November 24, 2009

The National Association of Insurance Commissioners (NAIC) announced its qualified support for the Federal Insurance Office Act of 2009 (H.R. 2609) after successfully advocating for changes to the bill. In a letter to the Financial Services Committee, NAIC states the changes "strike an appropriate balance among the needs of consumers, state regulators, and federal negotiators by preserving important state prudential and market regulation while allowing for agreements with equivalent regulatory systems."

But the NAIC letter goes on to say "…we will continue to oppose a federal functional regulator for insurance or misguided attempts to further empower the FIO, but as currently drafted, the FIO is an appropriately narrow and targeted improvement to our system of supervision. Therefore, the National Association of Insurance Commissioners (NAIC) supports the legislation as amended."

"H.R. 2609 may have been pulled back from the precipice of federal insurance regulation at the last minute thanks to the NAIC's amendments, but it still places our national system of state based insurance regulation on shaky ground," said PIA National Executive Vice President & CEO Leonard C. Brevik. "It opens the door a crack to federal insurance regulation, when we should be making sure that door remains firmly closed."

"This bill sets up a structure within the Treasury Department which could quickly morph into a federal insurance regulatory system to supplant the states," Brevik said. "We strongly suspect that is the unspoken intent of this bill. Why else would a narrowly drawn bill to create an insurance information office be changed to make it so expansive that it had to be reined in at the eleventh hour to enable passage?"

NAIC Letter to House Financial Services Committee (11/17/09)