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PIA Members Blanket Capitol Hill in Effort to Assure Optional Federal Charter Bill is Dead on Arrival

PIA Main Street Agents Visit Capitol Hill - PIA membersfrom Louisiana make their rounds in the shadow of the U.SCapitol on April 6, 2006...
April 12, 2006

Less Than 24 Hours After Sununu-Johnson Legislation is Introduced, Professional Insurance Agents Conduct Major Campaign in Opposition

PIA Main Street Agents Visit Capitol Hill -  PIA members
from Louisiana make their rounds in the shadow of the U.S
Capitol on April 6, 2006 during the PIA Federal Legislative
Summit. (Left to right) PIA of Louisiana President Jared
"Butsy" Martin; Rep. Richard H. Baker (R-La.), Chairman
of the Capital Markets Subcommittee of the Financial Services
Committee; PIA National Vice President/Treasurer Robert P.
Page; and PIA of Louisiana Secretary/Treasurer David "Hal"

WASHINGTON, April 12, 2006 - Less than 24 hours after two Senators introduced legislation calling for a measure of federal regulation of insurance, members of the National Association of Professional Insurance Agents descended on Capitol Hill and urged lawmakers to kill the bill.

"We adamantly, adamantly, adamantly oppose the optional federal charter and to this bill in particular," said PIA National Executive Vice President & CEO Len Brevik in remarks to agents at the start of the April 6 summit.

Brevik predicted that a federal regulatory system would prove to be a disaster and that Main Street insurance agents would face twice as many problems working with a federal regulator than they would with the state-run system.

"The Sununu-Johnson bill reads like a book by horror novelist Steven King," Brevik said. "If this bill were ever to be enacted, we'd have a man-made disaster called the optional federal charter added to all the natural disasters we have been experiencing recently. We need to make sure that the Sununu-Johnson bill remains a work of fiction and that the optional federal charter gets killed off in the first chapter."

"Basically what you have are a handful of big banks and big life insurers pushing special interest legislation that will benefit them, but will be very detrimental to the states and to consumers," Brevik said. "That is why it is so important that PIA is putting more than 200 pairs of boots on the ground today, just as the proposal is being unveiled."

PIA National President Ray Peretti urged PIA members to emphasize PIA's unequivocal stance in opposition to the National Insurance Act of 2006 (S. 2509) during all of their visits with Members of Congress. "Remind them that the Main Street insurance agents in their districts - who are politically active and who vote - are opposed to this bill," said Peretti. Noting that similar proposals have been made periodically since 1976, he said "the time has come to dismiss this ill-advised idea once again."

"Optional federal charters would be detrimental to every state, consumers in every state and carriers as well as professional insurance agents." Peretti said. "PIA opposes optional federal charters, along with anything else that would undermine our system of state-based, functional regulation of insurance, which PIA supports."

PIA Meets with Sen. Sununu

Senator John Sununu (R-N.H.), co-sponsor of S. 2509, right,
discusses the  legislation with PIA National Regulatory
Affairs Committee Chairman and NCOIL member Don
Flanders, center. At left is PIA National Director of State
Affairs David Eppstein.

On the afternoon of April 6, PIA National Regulatory Affairs Committee Chairman Don Flanders sat down with Sen. John Sununu (R-N.H.), co-sponsor of S. 2509 along with Sen. Tim Johnson (D-S.D.), informing him of PIA's opposition.

"Sen. Sununu assured us there was no way his bill would supersede the states' ability to collect their premium taxes, and that companies would still be subject to all the requirements that they are now including any mandatory coverages," said Flanders, a fellow New Hampshire resident and three-term Republican state representative.

"It remains to be seen, of course, whether or not this actually takes place," Flanders cautioned. "We all know that someone is going to have to subsidize and finance this venture if a federal optional charter actually comes to pass, and I can't see how anything other than a premium tax of some sort is going to fund that. Apart from the premium tax, this also doesn't address the loss of fees to states from carriers."

"But Sen. Sununu did assure us that his door is open, he is willing to work with PIA directly and he will take our concerns into consideration," he said.

PIA Senior Vice President Patricia A. Borowski noted that this most recent push to enact optional federal charters is part of a coordinated push toward a federal regulatory system for insurance.

"The push for optional federal charters (OFC) or aspects of the State Modernization and Regulatory Transparency (SMART) Act is just a stalking horse to draw attention away from the real case being made for federalizing and reclassifying the business of insurance, including insurance law," Borowski said. "And the real powers leading this federal push are the banks and securities industries, along with their regulators."

During the 2006 Federal Legislative Summit, PIA members also advocated for the creation of a national natural catastrophe plan, reform of the National Flood Insurance Program (NFIP) and the creation of long-term solutions for terrorism insurance.

Founded in 1931, and celebrating its 75th anniversary in 2006, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street America.