Sen. Chris Dodd, D-Conn., U.S. Senate Banking, Housing and Urban Affairs Committee chairman, has released a draft of the financial services reform bill with aims of restoring American financial stability. Dodd hopes to create a sound economic foundation to grow jobs, protect consumers, rein in Wall Street, end too-big-to-fail financial institutions and prevent another financial crisis.
Although the legislation is 1,136 pages in length, it contains little reform related to the insurance industry. The Automotive Service Association (ASA) said the insurer provisions are a small part of the discussion draft bill.
Dodd did include:
• A single bank regulator.
• Consumer Financial Protection Agency – Creates an independent watchdog to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards and other financial products, while prohibiting hidden fees, abusive terms and deceptive practices.
• Agency for Financial Stability – An independent agency responsible for identifying, monitoring and addressing systemic risks posed by large, complex companies as well as products and activities that can spread risk across firms.
One important insurance provision has to do with a requirement for an annual report to Congress, according to ASA. The director of the Office of National Insurance shall conduct a study and submit a report to Congress on how to modernize and improve the system of insurance regulation in the United States no later than 18 months after the date of enactment.
The study shall consider:
• systemic risk regulation with respect to insurance;
• capital standards;
• consumer protection for insurance products and practices, and gaps in state regulation;
• the degree of national uniformity of state insurance regulation;
• the regulation of insurance companies and affiliates on a consolidated basis; and
• international coordination of insurance.
To view the full text of Dodd’s draft, visit ASA’s legislative Web site at www.TakingTheHill.com.
