WASHINGTON – April 2, 2009 - The Independent Insurance Agents & Brokers of America (the Big “I”) strongly opposes “The National Insurance Consumer Protection Act,” introduced in the House today by Rep. Melissa Bean (D-Ill.) and Rep. Ed Royce (R-Calif.).
“While it has an appealing title, this latest incarnation of Optional Federal Charter (OFC) legislation would damage the stable and healthy insurance marketplace to the detriment of consumers,” says Robert A. Rusbuldt, Big “I” president and CEO. “While the bill reintroduced today has a few changes, it is basically the same concept, optional federal chartering and deregulation of strong state consumer protections, which has rightfully been rejected and ignored by previous Congresses. There is no doubt the current regulatory system needs more uniformity and efficiency, but there are more prudent ways to accomplish this via targeted federal legislation.”
The Big “I” believes that local insurance regulation works best for consumers and the state regulatory system ensures a level of responsiveness that could not be matched at the federal level. The Big “I” believes that there is no regulatory crisis in the property casualty insurance market as a whole that necessitates a risky massive overhaul of its current regulatory structure.
“This legislation deregulates several areas that are currently overseen at the state level and sets up a system to allow regulated entities to choose their regulator, which would leave consumers vulnerable and expose the insurance market to the same types of problems experienced by other sectors of the financial services industry,” says Charles E. Symington, Jr., Big “I” senior vice president for government affairs. “We believe this is an imprudent proposal at a time when there needs to be a review of financial services regulation with all eyes focused squarely on the protection of consumers.”
The Big “I” supports modernization of insurance regulation through targeted federal legislation and strongly opposes day-to-day federal regulation of insurance. A targeted approach would overcome state-level impediments to reform and build on, rather than dismantle, the states’ inherent strengths—diversity, geographical uniqueness, innovation and responsiveness to consumers—to meet the challenges of today’s financial services industry and a rapidly changing insurance marketplace while protecting consumers.
“The Big ‘I’ is backed by many in the property casualty insurance marketplace in support of targeted federal legislation to reform the state insurance regulatory system,” says Tom Koonce, assistant vice president for federal government affairs. “Given today’s tough economic environment, such a pragmatic approach would not jeopardize or undermine the knowledge, skills, and experience of state insurance regulatory personnel by implanting an unproven new regulatory structure.”
Founded in 1896, IIABA (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, and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com.