Senate Banking Committee to debate National Insurance Act

WASHINGTON, D.C.— U.S. Senate Bill 40 was introduced May 24 and referred to the U.S. Senate Committee on Banking, Housing and Urban Affairs. Sponsoring the bill are Sens. Tim Johnson (D-S.D.), and John Sununu (R-N.H.), who introduced similar legislation last year.

The proposed bill would establish an optional Federal Charter to be used by insurers operating under the jurisdiction of multiple states. It calls for the creation of an Office of National Insurance, which would act under an extensive set of regulatory and supervisory powers that would be modeled after those exercised by federal banking agencies. Additionally, there would be a Division of Consumer Protection as well as a Fraud Division within the national office.

Senate Bill 2509, similar legislation, was introduced in April 2006. Two hearings were held to consider perspectives on insurance reform although the bill ultimately failed to move during the last legislative session. The only significant change to last year’s bill includes the ability of a person with a Federal Producer’s license under the new program to sell additional lines of insurance.

Neither Banking Committee Chairman Christopher Dodd (D-Conn.), nor ranking member Richard Shelby (R-Ala.), support moving forward with this year’s bill. Still, both senators who co-authored the legislation are hopeful that progress will be made.

The Automotive Service Association (ASA) states that it believes such a bill would only further complicate the insurance reform process and create major regulatory issues. Furthermore, this legislation would create problems for the consumer by making contact with their local regulators more difficult.

“The best opportunity for insurance reform still lies with Senate Judiciary Chairman Patrick Leahy’s (D-Vt.) McCarran-Ferguson Act repeal, S.B. 618 legislation. ASA encourages repairers to go to ASA’s Taking the Hill Web site and send a support letter to their senators and representatives,” says Bob Redding, ASA’s Washington, D.C., representative.

To send a letter to your senators and representatives supporting repeal of the McCarran-Ferguson Act, visit www.TakingTheHill.com and click on “Legislative Alert Center” in the left menu; then see the featured alert, “Support Repeal of McCarran-Ferguson Act,” and click the “Take Action” button.