Two members of the House of Representatives said they plan to introduce legislation on Thursday, April 2, that would establish a system of federal regulation for insurers.
In a joint statement Wednesday, Reps. Melissa Bean, D-Illinois, and Ed Royce, R-California, said the National Insurance Consumer Protection Act “would create a robust federal regulator for insurance to act as an alternative to the antiquated, non-uniform system of state insurance regulators currently in operation.
”The statement, however, provided no further detail regarding the proposal.An earlier outline of the bill called for setting up an office of national insurance, which would set guidelines for national insurers and oversee their financial and market conduct.
In addition, that outline said the legislation would establish a national guaranty corporation for national insurers if a state guaranty association does not provide policyholders a level of protection equivalent to the model standards of the National Association of Insurance Commissioners.The outline also included establishing a systemic risk regulator to monitor insurers
The joint statement cited the “meltdown” of American International Group Inc. and the crisis in the financial system as a whole “as proof of the vital need for regulatory reform of the insurance sector.”In the last Congress, Reps. Bean and Royce introduced legislation that would have set up a system of optional federal charters for insurers.
When the outline of the latest bill became public in February, some critics expressed concern that federal regulation might not be optional but mandatory for some large insurers.
Filed by Mark A. Hofmann of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com
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