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PIA Files Comments with U.S. Treasury on Regulatory Modernization

PIA National has filed extensive comments with the U.S. Treasury Department and the Federal Insurance Office (FIO)
December 20, 2011

PIA National has filed extensive comments with the U.S. Treasury Department and the Federal Insurance Office (FIO). The comments were solicited by the FIO in a Federal Register notice. In addition, FIO Director Michael McRaith met with PIA National and encouraged us to address additional specific areas in our comments.

PIA reiterated its firm support for state regulation of insurance and our staunch opposition to expanded federal regulation of insurance. In addition, we commented extensively on producer licensing issues; foreign corporation and business entity licensing issues; crop insurance; the Nonadmitted and Reinsurance Reform Act (NRRA); the appropriate role for the FIO in advancing regulatory modernization; and outreach to historically underserved communities.

Excerpts from the PIA National filing:

  • “PIA believes that a modernized insurance regulatory system must remain state based and that insurance consumers, the insurance industry and the American economy would be poorly served by expanding federal insurance regulation, either in whole or in part. Contrary to some assertions, the state based system of insurance regulation is not broken. It has performed exceptionally well, especially during the 2008 financial crisis.”
  • “The FIO should assume a complimentary role to the existing national system of state-based insurance regulation. The FIO should not assume a competitive stance relative to state insurance regulatory authorities. In addition, we believe it is imperative that the FIO cultivate a cooperative relationship with state insurance legislators, who determine domestic insurance regulatory policy which is then carried out by state insurance regulators.”
  • PIA is willing to expand its current activities to work with the FIO to develop innovative programs to better reach minority communities and expand the number of independent insurance agents and agencies in these communities.
  • Flows of capital can be global because money is fungible. Insurance, by contrast, is geographically specific. All property-casualty personal lines and most commercial lines insure assets that exist in a fixed, physical place. State insurance regulators are best equipped to supervise the business of insurance because they have the local expertise needed to regulate what is essentially a local, not a global, financial service.
  • We do not believe that it is a proper role for the federal government to take administrative action that dictates the maximum compensation of a private insurance agent, for any line of insurance. The decision to do so has negatively impacted a vital part of the crop insurance delivery system. While PIA continues efforts to repeal these compensation caps, we would be similarly opposed to comparable action on other lines of insurance.

You can read the entire PIA National comment filing to Treasury here. In addition, PIA submitted to appendix items: our Roadmap to State Regulatory Modernization and PIA’s statement submitted to NAIC on foreign corporation filings.

See PIA's comments sent to FIO: PIA Comments in Response to Treasury/FIO (filed 12/19/11)
PIA Appendix #1: Roadmap to State Regulatory Modernization (filed 12/19/11) 
PIA Appendix #2: Foreign Corporation Filings (PIA statement submitted to NAIC)