Professional Insurance Agents Applaud House Financial Services Committee for Passing International Insurance Bill
WASHINGTON — The National Association of Professional Insurance Agents (PIA) applauds the U.S. House Financial Services Committee for passing the Transparent Insurance Standards Act of 2016 (H.R. 5143) by a vote of 34-25.
PIA strongly supports this legislation, as it seeks to increase transparency and cooperation in international negotiations and to ensure that state insurance regulation is afforded appropriate deference in any federal or international decision-making process.
H.R. 5143 enhances Congress’s oversight of international deliberations relating to insurance standards by requiring the U.S. Treasury Department and Federal Reserve to consult with Congress and state insurance regulators represented by the National Association of Insurance Commissioners (NAIC) before approving any international insurance standards.
The bill sets negotiating objectives for U.S. negotiators regarding international insurance standards to ensure that the U.S. doesn’t enter into an agreement that would disrupt the domestic insurance industry.
The bill would require federal regulators to submit analyses to Congress regarding the anticipated impact of proposed international standards on the United States, and would give Congress 90 days to approve or reject the proposal; create the analyses and other related reports with feedback from state regulators on market impacts; publish a proposed agreement in the Federal Register and take public comment for 30 days; and ensure that an international capital requirement for U.S. insurers is consistent with domestic capital-standard rules, including one recently proposed by the Fed.
“For over 150 years, the state-based system of insurance regulation has successfully protected consumers and created a competitive and diverse U.S. insurance market,” said PIA National Executive Vice President & CEO Mike Becker. “If global standards are promulgated without appropriate consideration of the unique state-based system of U.S. insurance regulation, they may actually increase systemic risks and consumer costs by pushing small and midsize companies out of business, reducing competition.”
Notably, the legislation also prohibits the U.S. from entering into an international covered agreement that would grant the Federal Insurance Office (FIO) any authority to supervise or regulate the business of insurance.
“The role of the FIO in its enabling legislation is unambiguous in that it is specifically prohibited from acting in any manner as a regulator or supervisor of the business of insurance,” said PIA National Vice President of Government Relations Jon Gentile. “It is gratifying to see Congress reaffirm this principle.”
PIA National worked with the bill’s sponsor, Rep. Blaine Luetkemeyer (R-MO) in developing the legislation and will continue to advocate for its passage.
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.