WASHINGTON, D.C., March 31, 2008— The Independent Insurance Agents & Brokers of America (the Big “I”) expressed its opposition to the insurance provisions contained in the Blueprint for Regulatory Reform unveiled today by Treasury Secretary Henry Paulson.
In reference to the Optional Federal Charter (OFC) section, The Big “I” notes that the Treasury Department has not recognized that the current insurance regulatory system has functioned effectively to protect consumers and the safety and soundness of the industry. State regulation has a much better track record than federal regulation for achieving meaningful results and assistance for consumers. A clear example of federal regulation failing for financial services is the current subprime mortgage mess, a problem that was created under the watch of federal regulators.
"While there may be some merit in the role envisioned for the Fed to identify and facilitate corrections of systemic problems in the financial services industry, the OFC section of the blueprint is clearly swimming upstream,” says Bob Rusbuldt, Big “I” President & CEO. “It’s hard to see Congress supporting a proposal that calls for massive deregulation of the industry and a huge new federal bureaucracy.”
Insurance, under its current regulatory structure, remains one of the few stable sectors in the financial services industry. In fact, S&P just released a report showing that insurer insolvencies are currently at a 10-year low. The Big “I” questions the value in overhauling regulation for a sector of the financial services industry that has been a bright spot of stability.
“The Treasury’s recommendation does not come as a surprise since they would become the new federal insurance regulator,” says Charles E. Symington, Jr., Big “I” Senior Vice President of Government Affairs. “Clearly, we need more uniformity and efficiency in our regulatory system, but there are better ways to achieve this reform with less risk for the market."
This week, approximately 1,200 independent insurance agents will meet with their members of Congress to oppose the plan as part of the Big “I” Legislative Conference & Convention.
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 300,000 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.