“It’s been a long and arduous process, but the final version of this bill does not impose onerous new federal or dual regulation on the property-casualty insurance industry,” said Chamness of NAMIC. “While we remain concerned by the bill as a whole, the Dodd-Frank bill recognizes that the property-casualty insurance industry is unique among financial services and recognizes the prudent management of P/C insurance companies – particularly mutual insurance companies – and the performance of the states in protecting consumers and ensuring solvency since the financial crisis began.” “Significant improvements have been made to the final bill to minimize the potential negative consequences of adding federal oversight to the state-based insurance regulatory system. However, deep concern remains over the long-term impact of this legislation on U.S. competitiveness for the financial services sector,” said David A. Sampson, president and CEO of the Property Casualty Insurers Association of America (PCI).
“It is important to note that this is still only the midpoint for financial services reform. We have a long road ahead of us as we move into the rule development phase. We look forward
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to working with regulators to preserve a strong and stable insurance marketplace to protect home, auto and business owners,” concluded Sampson.
“The Big ‘I’ believes Congress made the correct decision in the final financial services regulatory reform legislation by leaving day-to-day regulation of the insurance market at the state level,” said Robert Rusbuldt, IIABA president and chief executive officer. “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 the House and Senate have both recognized the strength of the state regulatory system.” According to Rusbuldt, The changes made to the FIO during conference between the House and the Senate “will go a long way to prevent unnecessary and arbitrary preemption of state laws – laws that have protected consumers for years and were particularly critical during the financial crisis. These changes include allowing for a de novo review of FIO preemption decisions, thereby creating a more level playing field for state regulators to challenge a decision that adversely impacts state laws and insurance consumers.” “While the Big ‘I’ has not endorsed the legislation, we do appreciate the improvements made to the FIO during conference negotiations,” said Charles Symington, IIABA senior vice president of government affairs.
Another provision included in the legislation reforms the regulation for multi-state non-admitted, or surplus lines, insurance to provide greater clarity for insurers and their customers. Under the new system, the home state of the insured serves as the primary regulator.
This is a perfect example of the proper way to modernize insurance regulation: targeted federal legislation to improve the state system without creating a federal regulator,” said IIABA’s Symington.
“Reforming the regulation of surplus lines insurance has been among NAMIC’s goals for years,” Chamness said. “We applaud Congress for including this common sense reform in the Dodd-Frank bill.” A representative organization of the nation’s surplus lines brokers, the National Association of Surplus Lines Offices (NAPSLO), agreed.
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“NAPSLO is pleased that the surplus lines regulatory reform language was included in the financial services reform legislation approved by the House and NAPSLO believes that the Senate will adopt these reforms, shortly,” said Richard Bouhan, NAPSLO executive director. “We believe we are now close to meaningful surplus lines regulatory reform legislation becoming a reality and then the work of implementing this legislation in the states will begin.”
Flood Reform
Passes U.S. House
continued from page 5
believes that the NFIP needs a long term extension to bring stability to the marketplace. Additionally, homeowners and businesses deserve the ability to purchase business interruption insurance and additional living expenses coverage in order to properly insure their property. We hope the Senate will soon follow suit and pass H.R. 5114.” The American Insurance Association (AIA) agreed with the IIABA’s view.
“A long-term reauthorization of the NFIP is of great importance,” said Leigh Ann Pusey, president and CEO of AIA. “The recent lapses in the NFIP due to the use of short-term extensions have caused disruptions to homeowners, businesses and hindered real estate closings nationwide.
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