House Financial Services Subcommittee Holds Second Insurance Regulation Hearing
November 1, 2007
The House Financial Services Capital Markets, Insurance and Government Sponsored Enterprises Subcommittee held the second in a series of hearings on insurance regulation on October 30, 2007. The Honorable Craig Eiland, Texas House of Representatives, testified on behalf of the National Conference of Insurance Legislators against optional federal charter; Mr. Alessandro Iuppa, Senior Vice President, Government & Industry Affairs, Zurich, testified on behalf of the Financial Services Roundtable for an optional federal charter; Mr. J. Robert Hunter, Director of Insurance, Consumer Federation of America, testified against a federal charter; Mr. Frank Nutter, President, Reinsurance Association of America, for a federal charter; Mr. Scott Gilliam, Assistant Vice President & Government Relations Officer, The Cincinnati Insurance Companies, against a federal charter; Mr. John W. Felton, President, Tennessee Brokerage Agency, testified on behalf of the National Association of Independent Life Brokerage Agencies for a federal charter.
All the witnesses testified that the current state system of insurance regulation is in need of reform, but they differed on their assessment of the optional federal charter approach. Hunter testified that an optional federal charter will enable the biggest insurers to "forum shop" for whichever regulator offers the least regulation. He stated that this would lead to less consumer protection from both the state and federal regulators. His testimony included a reference to "reverse competition" in certain lines of insurance, including title insurance, but offered no specific prescription to address it.
The subcommittee plans to conduct several more hearings on insurance regulation during the 110th Congress.