Post by Sapphire Capital on Aug 11, 2008 23:44:26 GMT 4
WASHINGTON, Aug 11, 2008 /PRNewswire via COMTEX/ -- Insurance Agents Say There Is No Consensus on Insurance Information Act;
Bill as Currently Drafted is a Broad Assault on the Authority of All States
WASHINGTON, Aug. 11 /PRNewswire-USNewswire/ -- The National Association of Professional Insurance Agents has sent letters to all of the nation's state commissioners of insurance and to Members of Congress, warning against the unintended consequences of the Insurance Information Act of 2008 (H.R. 5840).
"Some in Congress may be tempted to think that there is consensus within the insurance industry regarding H.R. 5840. This is not the case," said PIA Executive Vice President & CEO Leonard C. Brevik. "Our letter to Congress along with our letter to all of the state insurance commissioners point out that there is no consensus on this bill."
What started out as a bill to create an insurance information office and deal with insurance issues in international agreements has become legislation that would enable federal regulation of insurance. Under H.R. 5840, Congress grants new powers to the Secretary of the Treasury, making the Secretary the principal federal authority for domestic and international insurance issues of national interest with the power to determine which state laws, regulations and industry practices will be preempted.
H.R. 5840 effectively guts the McCarran-Ferguson Act of 1945 and the Gramm-Leach-Bliley Act of 1999, which establish and affirm that the states are the regulators of the business of insurance.
"PIA is concerned that Congress is trying to ride roughshod over our state departments of insurance," Brevik said. "This bill has been quietly transformed into enabling legislation for federal insurance regulation."
PIA believes that consumers are best served by the current system under which the business of insurance is regulated by the states. PIA opposes federal regulation of insurance, and also opposes proposals which would create a dual regulatory system through an optional federal charter for insurers, which would essentially allow them to decide whether to be regulated by the states or the federal government.
"Supporters of H.R. 5840 are now attempting to convince members of Congress that these powers are not new, will only be exercised under very limited circumstances, and only as a last resort," said the PIA letter to the state commissioners of insurance. "Unfortunately, the actual language of the bill does not track with the narrowness of these comments, and press comments do not mitigate that problem. Hence, those that desire to transfer insurance regulation from the states to the federal government may do so under this current language."
"PIA believes that the current version of H.R. 5840, the Insurance Information Act of 2008, effects a broad assault on the authority of all states and the Departments of Insurance that regulate the business of insurance," the letter goes on. "We respectfully suggest that you contact your federal elected officials to express your concerns about this flawed legislation."
A separate letter has been sent to Members of Congress detailing the flaws in H.R. 5840 and its potential for creating unintended consequences.
Founded in 1931, 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 SM. PIA's web address is www.pianet.com.
PIA's Letter to State Insurance Commissioners:
www.pianet.com/doc/Issues/5840Memo073108.pdf
PIA's Letter to Members of Congress:
www.pianet.com/doc/Issues/5840Letter073108.pdf
SOURCE National Association of Professional Insurance Agents
www.pianet.com/