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Federal Insurance Office Passes House, Preemptions Limited

A bill containing a provision establishing a Federal Insurance Office in the Treasury Department (H.R. 4173) passed the House on June 30 and awaits action...
July 7, 2010

A bill containing a provision establishing a Federal Insurance Office in the Treasury Department (H.R. 4173) passed the House on June 30 and awaits action in the Senate. The FIO's ability to preempt inconsistent state laws when concluding bilateral insurance trade agreements with foreign countries was considerably watered down. Under the bill, the FIO will have no regulatory authority, but it will have the power to monitor all activities related to the business of insurance except for health insurance and long term care insurance. The National Association of Insurance Commissioners said the bill "largely preserves the critical role of state insurance regulators in protecting consumers and ensuring the viability of the insurance industry."

"PIA remains concerned with the overall intent of the FIO because this can be a first step toward federal regulation," said PIA National Director of Federal Affairs Mike Becker, commenting in the National Underwriter. "However, we are pleased to see that the FIO, in its current state, does preserve state regulation, which is our top priority." H.R. 4173 is expected to be considered by the Senate after lawmakers return from their Fourth of July recess next week.