The National Association of Professional Insurance Agents, which represents independent professional insurance agents in all 50 states, Puerto Rico and the District of Columbia, US, has opposed the Insurance Information Act.
The Insurance Information Act (HR 5840) was introduced on April 16, 2008 by congressman Paul Kanjorski, the chairman of the house financial services capital markets, insurance and government sponsored enterprises subcommittee.
The national Board of Directors of The National Association of Professional Insurance Agents (PIA National) said that the proposed bill is yet another piece of legislation that is designed to advance federal regulation of insurance, which PIA opposes.
Far from being benign as its title suggests, the Office of Insurance Information would have broad authority to preempt state laws and set national insurance policy. It is, in fact, a federal insurance regulatory agency. Calling it an information office is a misnomer. PIA added the bill sets up a dual system of regulation that is not optional.
Another provision in the bill provides for the Secretary of the Treasury to appoint a deputy assistant secretary of the treasury to head the Office of Innovation and Improvement, and that this individual is authorized to determine whether inconsistencies…exist and, in the case of any such determination, shall notify the appropriate State of such determination.
It adds that a state can appeal a determination, but only to the Secretary of the Treasury, and that ‘no state may enforce any insurance law or regulation that has been preempted pursuant to this subsection’.
Len Brevik, executive vice president and CEO of PIA National, said: This provision in the bill could not only lead to insurance regulation by decree on the part of the Secretary of the Treasury, but it also would allow foreign governments throughout the world to preempt the laws of any state in the US, simply by getting the Secretary of the Treasury to agree. This is outrageous.
A provision in HR 5840 stated: Any law or regulation of any state is reempted to the extent that such law or regulation is inconsistent with federal policy on international insurance matters set forth in an agreement entered into by the US or on its behalf by a designated representative with a foreign government or regulatory entity.