Federal Bill Would Establish National Insurance Regulations
April 20, 2009

The U.S. House of Representatives currently is considering a bill that would establish a system of regulation and supervision for insurers, insurance agencies and insurance producers chartered or licensed under federal law. If passed, the goal of the system would be to ensure the stability and financial integrity of those insurers, agencies and producers in an effort to protect insureds.

The bill, tagged the National Insurance Consumer Protection Act, recently was introduced by Congresswoman Melissa L. Bean (D-Ill.) and Congressman Ed Royce (R-Calif.).

"The events of 2008 show us that insurance reg[ulation] reform can no longer be postponed-it is needed now," says Bean. "This bill will provide consumer protection and choice while eliminating barriers to industry competitiveness in the global market."

"Never before has the federal government been so invested in an industry it has no regulatory authority over. Leaving the business of insurance regulation solely to the various state insurance commissioners, while the federal government provides taxpayer-funded assistance is simply irresponsible," adds Royce.

Under the terms of the bill, states would maintain responsibility for regulating state-licensed insurers, agencies and producers.
The bill also would establish a single nationwide phone number through which consumers could share problems with their local federal or state insurance regulator. The Office of National Insurance also would have a physical office and staff in every state through its Division of Consumer Affairs.

The bill currently is under the consideration of the House Committee on Financial Services, the Committees on the Judiciary and the Energy and Commerce Committee.

This is one of two major Federal insurance regulation reform bills introduced this year. Another, the Insurance Industry Competition Act of 2009, would amend the McCarran-Ferguson Act as such that the Federal Trade Commission Act would be applicable to the business of insurance "to the extent that such business is not regulated by State law." (CLICK HERE for related story.)

CLICK HERE for full text of the National Insurance Consumer Protection Act.

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