A proposed Office of Insurance Information would just be the first step toward creating a federal insurance regulator, state insurance legislators said today at a congressional hearing.
The legislation “would establish a framework that a future Congress could build upon to create a federal insurance regulator, such as an [optional federal charter] or an office of national insurance,” said Rep. Brian Kennedy, D-R.I., president of the National Conference of Insurance Legislators of Troy, N.Y.
“Creating [an Office of Insurance Information, and not expecting an [optional federal charter] is like building a baseball diamond and asking people not to play,” Mr. Kennedy said.
The legislation, introduced by Rep. Paul Kanjorski, D-Pa., chairman of the capital markets subcommittee, which is part of the House Financial Services Committee, would authorize an Office of Insurance Information within the Department of the to collect, analyze and advise the secretary of the Treasury on major domestic and international insurance issues.
The office would have the power to pre-empt state insurance regulators in connection with international treaties that affect insurance.
The National Association of Insurance Commissioners, based in Kansas City, Mo., indicated that it is willing to support the legislation.
It is “on its way to being narrowly crafted enough that the regulatory community could stand behind it,” said Michael McRaith, director of the Illinois Division of Insurance, who testified on behalf of the NAIC.
Jeremiah Norton, the Treasury Department’s deputy assistant secretary for financial institutions policy, said the administration supports the bill, but he believes that the office under the legislation would be too independent from the Treasury. “It’s not necessary” for the head of the office to have such independence because the insurance adviser would primarily be advising the secretary of the Treasury, he said.
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