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PIA, Insurers Urge Changes in Financial Reform Legislation

As debate continues in the Senate on the Wall Street Transparency and Accountability Act of 2010 (S. 3217), insurance industry representatives are advocating some things...
May 4, 2010

As debate continues in the Senate on the Wall Street Transparency and Accountability Act of 2010 (S. 3217), insurance industry representatives are advocating some things should be changed. An official with the American Insurance Association (AIA) expressed concern that the current draft of the legislation reflects a "very bank-centric approach to reform." Concern was expressed about a provision that would enable federal regulators to levy a fee against large insurers for use in winding down any firm put into receivership. While insurers would be left in the state-based resolution system, insurance companies could be forced to pay for future bank bailouts.

David Sampson, chief executive officer of the Property Casualty Insures Association of America, told the National Underwriter that the proposals for an Office of National Insurance (ONI) and Office of Financial Research "would add layers of duplicative information and data gathering for insurance that could result in inefficiencies in the marketplace, without benefit to the consumer." The same article noted PIA's opposition to the entire concept of an ONI.

"As currently written, the bill creates an Office of National Insurance (ONI) within the Treasury Department that is overly broad in scope and that undermines state-based insurance regulation, which has proven effective in largely insulating the insurance industry from the recent financial crisis," said Leonard Brevik, PIA executive vice president and CEO.  "This is a federal government solution that - like many federal solutions - is being proposed for a problem that does not exist," he said. "This federal insurance office is too expansive, too expensive and counterproductive," he concluded.

Insurers Urging Changes In Reform Legislation (National Underwriter 4/29)