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Conference to Address ONI Provisions in Financial Reform Bill

The House-Senate conference that is charged with reconciling the House and Senate financial services reform bills will take up the powers of the Office of...
June 15, 2010

The House-Senate conference that is charged with reconciling the House and Senate financial services reform bills will take up the powers of the Office of National Insurance (ONI) in a meeting on June 15.

Conferees will be using the Senate bill as the base text, which gives the Treasury Department strong authority to preempt state law in negotiating bilateral trade agreements with foreign countries.  The House bill effectively gives state regulators veto authority over foreign trade agreements negotiated by the Treasury Department, and allows courts and Congress to pay a role in the process.

State legislators have written a letter to conferees asking that the language in the Senate bill with strong preemption authority be replaced with the much weaker language contained in the House bill. The National Conference of State Legislators (NCSL) and the National Conference of Insurance Legislators (NCOIL) also asked that state banking, securities and insurance regulators be added to the Financial Stability Oversight Council that would be created through the legislation.

What It Means to Agents: PIA joins with the NAIC in supporting the House language. In addition, PIA supports a change in the assignment for a study of insurance regulation. The current language - inserted by supporters of optional federal charters - mandates the newly-created ONI to conduct the study and report back to congress with recommendations. PIA has advocated that the study should instead be conducted by the non-partisan Government Accountability Office (GAO). Having the ONI in essence study itself and make recommendations to Congress on the scope of its own authority will produced a biased recommendation favoring federal regulation of insurance.