The Senate has passed H.R. 4173, Restoring American Financial Stability Act of 2010, in a 60-39 vote, after having stalled activity on the conference report for more than a week. The legislation is now awaiting signature by President Barack Obama. The bill includes augmentation to the current insurance policies, creating a Federal Insurance Office (FIO) with the power to discuss international insurance agreements and the power to monitor the industry from a federal level.
Title VI of the bill outlines the Federal Insurance Act of 2009, which authorizes the Federal Insurance Office to: monitor the insurance industry. The bill authorizes the Office to help identify issues or gaps in the regulation of insurers that could contribute to a systemic crisis in the insurance industry or the U.S. financial system. It also allows authorization of monitoring the extent to which traditionally underserved communities and consumers, minorities, and low- and moderate-income persons have access to affordable insurance products covering all lines of insurance, except health insurance. Other bill actions can be found in the summary or text of the legislation at ASA's legislative website, www.takingthehill.com.
The bill enlarges the scope of the Federal Insurance Office's authority regarding all insurance types except health. The bill mandates that the Federal Insurance Office report back to Congress on the modernization and improvement of insurance regulation in the United States. The report to Congress will address the following considerations: systemic risk regulation with respect to insurance, capital standards and the relationship between capital allocation and liabilities, and consumer protection for insurance products and practices, among other considerations.
The study and report shall also contain any legislative, administrative or regulatory recommendations, as the director determines appropriate, to carry out or effectuate the findings set forth in such a report. With respect to the study and report, the FIO director shall consult with state insurance regulators, consumer organizations, representatives of the insurance industry and policyholders, and other organizations and experts, as appropriate.
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