WASHINGTON, D.C., July 21, 2010 - The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) today commented on President Barack Obama’s signing of the “Dodd-Frank Wall Street Reform and Consumer Protection Act” into law. The new law makes significant changes to financial services regulation and was drafted in response to the recent financial crisis.
While not endorsed by the Big “I”, the final law does include several major victories for Big “I” members. The majority of this legislation does not apply to insurance and leaves the day-to-day regulation of insurance at the state level. Title V, the insurance title of the bill, includes surplus lines and reinsurance reform and creates a Federal Insurance Office (FIO) which would serve as a non-regulatory insurance informational office at the federal level. The office would also play a role in representing U.S. interests with international insurance agreements.
“The Big ‘I’ is pleased that the final financial services regulatory reform legislation leaves day-to-day regulation of the insurance market at the state level,” said Robert Rusbuldt, Big “I” president & CEO. “Property/casualty insurers were not to blame for the financial crisis and pose no systemic risk to the overall economy. While the current system no doubt needs more uniformity and modernization, state regulation of insurance has a proven track record of ensuring insurer solvency and consumer protection, and it’s encouraging that President Obama and Congress recognized the strength of the state regulatory system."
The new law does modernize the state-based regulatory system with the inclusion of the “Nonadmitted and Reinsurance Reform Act (NRRA),” a provision strongly supported by the Big “I.” This section will streamline the regulation of surplus lines by making the insured’s home state the sole regulator in surplus lines transactions. The Big “I” supports ways to improve the state regulatory system through targeted reforms such as this NRRA provision.
“While the Big ‘I’ did not endorse the legislation, we do appreciate the improvements made to the FIO during conference negotiations that were ultimately signed into law,” said Charles Symington, Big “I” senior vice president of government affairs. “We were also pleased with the inclusion of the ‘Nonadmitted and Reinsurance Reform Act’ in the overall package, which is a perfect example of the appropriate way to modernize insurance regulation: targeted federal legislation to improve the state system without creating a federal regulator.”
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
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