House Passes International Insurance Bill

The Big “I” applauds the U.S. House of Representatives for passing important legislation that addresses transparency in international negotiations related to insurance.

This week, the House passed H.R. 5143, the “Transparent Insurance Standards Act of 2016” by Financial Services Committee, Housing and Insurance Subcommittee Chairman Rep. Blaine Luetkemeyer (R-Missouri), by a vote of 239-170.

The bill aims to create procedural “checks” for federal officials in international insurance negotiations to ensure that the U.S. state-based system of insurance regulation remains strong. The Big “I”-supported legislation would establish a series of requirements to fulfill before federal officials may consent to adopting certain international insurance standards, such as ensuring that any standard would not require the U.S. to change the way it regulates insurance.

The bill also creates negotiating objectives for U.S. parties to follow, requiring them to consider the impact of any standards on policyholder protection, as well as the availability and cost of insurance products. H.R. 5143 further requires consultation with state insurance regulators regarding the development of international insurance standards, and explicitly prohibits the Treasury Department, including the Federal Insurance Office, from expanding its authority through certain international agreements.

Also this week, Rep. Denny Heck (D-Washington) introduced H.R. 6436, the “U.S. Insurance Regulation Works Act of 2016.” Like H.R. 5143, Rep. Heck’s legislation seeks to support state-based regulation in the wake of rising international insurance issues.

With the 114^th Congress expected to adjourn shortly, it is unlikely that the U.S. Senate will consider Chairman Luetkemeyer’s bill this year. However, the 115^th Congress is expected to consider legislation that addresses international insurance issues either as a standalone bill or as part of the “Financial CHOICE Act”—a wide-ranging financial services reform proposal by Rep. Jeb Hensarling (R-Texas), Chairman of the full House Financial Services Committee.

The Big “I” intends to continue working with Congress and the new Administration to help ensure that any future legislation or executive branch initiatives regarding international insurance policy recognizes that the U.S. state-based system of insurance regulation has protected consumers and promoted competitive insurance markets for more than 150 years.

Jennifer Webb is Big “I” federal government affairs counsel.