WASHINGTON, D.C., Feb. 4, 2014 –The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) today testified before the U.S. House of Representatives Committee on Financial Services Subcommittee on Housing and Insurance at a hearing titled, “The Federal Insurance Office’s Report on Modernizing Insurance Regulation.”
Jon Jensen, chairman of the Big “I” government affairs committee, represented the association which was the only group with a witness giving the perspective of the main street insurance agent. Jensen is president of Correll Insurance Group, an independent insurance agency headquartered in Spartanburg, S.C.
In late December, the Federal Insurance Office (FIO) released the long-overdue report on “Ways to Modernize and Improve the System of Insurance Regulation in the United States.” The report, originally due in January 2012, was mandated by the Dodd-Frank Wall Street Reform Act of 2010 (Dodd-Frank) which created FIO. The report’s findings were discussed by two witness panels during the hearing. The first was a government panel that included Michael McRaith, Federal Insurance Office director, and Thomas Leonardi, Connecticut Insurance Department commissioner. The second panel included the Big “I” and other industry representatives.
“The recommendations offered in this report are, for the most part, modest in scope and suggest that the insurance regulatory system is functioning at a high level and does not require a significant overhaul or restructuring,” said Jensen. “IIABA agrees strongly with several of these recommendations (including FIO’s call for the adoption of the much-discussed NARAB II producer licensing reform legislation) and is skeptical about others.”
Jensen presented the association’s position in agreement with the FIO report that insurance regulation could be improved and modernized in certain areas, but that any federal action should be targeted and limited with day-to-day regulation left in the in the hands of state officials.
“The report recommends the use of targeted and limited federal intervention to address problems that the states are unable to resolve on their own,” continued Jensen. “The report notes that federal action of this kind should be limited to those instances where demonstrated deficiencies exist, where there is a national interest in addressing a particular problem, and where state officials are unable – as a result of practical hurdles or collective action challenges – to resolve the challenges themselves.”
The FIO report endorsed the need for Congress to enact the National Association of Registered Agents and Brokers (NARAB II) legislation. The association has lobbied for the bill for several years and is pleased that it was recently passed by the Senate.
Jensen said, “Perhaps most notably, FIO proposes a specific solution to the challenges and problems that persist in the licensing arena – the enactment of the National Association of Registered Agents and Brokers Reform Act (or “NARAB II”)..…The NARAB II proposal is a textbook example of how targeted action at the federal level can enhance and improve state insurance regulation.”
Jensen's full testimony for the record is available online. The committee website also includes more information and a webcast.
Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than a quarter of a million agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, health, employee benefit plans and retirement products. Web address: www.independentagent.com.