In a recent article in Independent Agent magazine, Big “I” Federal Government Affairs Counsel Jennifer Webb reported that before leaving Washington, D.C. ahead of the November elections, members of Congress raised concerns about the potential insurance impacts of international regulatory discussions.
According to Webb, the Big “I” is concerned that such activity could erode the state-based system of insurance regulation while resulting in market consolidation and creating an uneven playing field for insurance companies—which may mean fewer markets for independent agents.
Last week, the two subcommittees of the U.S. House Financial Services Committee held hearings on international insurance issues. First, the Monetary Policy and Trade Subcommittee held a hearing on the Financial Stability Board (FSB), an international organization of government officials from major economies that was established after the financial crisis to promote and coordinate reform of international financial regulation and standard setting. The hearing addressed the impact of the FSB’s activities on the insurance industry.
The next day, the Housing and Insurance Subcommittee held a hearing regarding ongoing discussions between the U. S. and the European Union, to negotiate a bilateral agreement regarding reinsurance regulation.
The Big “I” supports the state insurance regulatory system and is concerned about federal and international encroachment. The association remains dedicated to preserving the state-based system of insurance regulation and firmly believes that the attributes of this system dramatically outweigh any perceived inefficiencies. State insurance regulation offers considerable benefits, especially in the areas of solvency regulation and consumer protection.
Current legislation that addresses such concerns and supports the state-based regulatory system includes H.R. 5143, the “Transparent Insurance Standards Act of 2016,” which Rep. Blaine Luetkemeyer (R-Missouri)introduced earlier this year. H.R. 5143 aims to create procedural “checks” for federal officials in international insurance negotiations to ensure the U.S. state-based system of insurance regulation remains strong. It also requires consultation with state insurance regulators.
The Big “I” supports Rep. Luetkemeyer’s bill in addition to similar legislative efforts. The Financial Services Committee passed H.R. 5143 in June, but the full House has not yet considered it.
This article originally appeared in Independent Agent Magazine