House Financial Services Subcommittee Holds Hearing on Insurance Regulation
October 4, 2007
Yesterday, the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises held a hearing on insurance regulation.
Subcommittee Chairman Paul Kanjorski (D-PA) stated that this was the first of a series of hearings the subcommittee will hold on regulation of the insurance industry. He stressed that the question is not whether to reform regulation of insurance, but rather how to reform it. Chairman Kanjorski has indicated his support for some form of an optional federal charter in the past, but he said he is not wedded to any particular approach. He laid out the agenda for the hearings and said the subcommittee will not rush. They will look at generic reform issues and then appoint task forces to look at targeted issues. He wants any legislation to be a bi-partisan effort. Witnesses at this hearing included Walter Bell, Insurance Commissioner of Alabama and Chairman of the NAIC, and executives from the insurance industry representing both proponents and opponents of federal regulation.
All of the witnesses testified that the present state system is sluggish in its consideration and approval of new products and forms, and that the goal of uniformity so often talked about has not been met. Chairman Kanjorski wondered aloud whether a whole new federal regulatory body would need to be invented to address the limited problems witnesses were complaining about. Commissioner Bell testified that the states were making progress in these areas. Kanjorski replied that maybe Congress could enact a bill to force the remaining states to act more quickly. This suggested that he may be inclined to look for a more limited approach than the federal charter. Other subcommittee members’ comments and questions suggested they would like reform to speed up, and various levels of support or opposition to the federal charter position. This will be a long term process according to Chairman Kanjorski.