On Tuesday, Sept. 29, the Housing and Insurance Subcommittee of the House Financial Services Committee held a hearing entitled “The Impact of Domestic Regulatory Standards on the U.S. Insurance Market” to examine the impact of existing and proposed federal and state regulatory standards on the U.S. insurance market.

At the hearing, the committee received testimony from Michael McRaith, director of the Federal Insurance Office (FIO); Tom Sullivan, senior advisor for the Department of Banking Supervision and Regulation at the Federal Reserve Board of Governors; John Huff, director of the Missouri Department of Insurance, Financial Institutions & Professional Registration; and Roy Woodall, independent member of the Financial Stability Oversight Council at U.S. Department of the Treasury.

The day before, in preparation for the hearing, the Big “I” was invited to brief subcommittee staff on issues important to the association. Charles Symington, Big “I” senior vice president of external and government affairs, represented the Big “I,” which was the only agent/broker association invited to the briefing. Representatives from two insurer trade associations joined Symington. In addition to the briefing, the Big “I” also submitted formal testimony for the subcommittee hearing. The testimony included the association’s stance on important issues such as the National Association of Registered Agents and Brokers (NARAB) implementation, flood insurance, the “Policyholder Protection Act” and expansion of the Risk Retention Act.

While much of the hearing focused on insurance capital standards and the designation of insurers as systemically important financial institutions, it also addressed two issues very important to the Big “I.” In his opening statements at the subcommittee hearing, Chairman Blaine Luetkemeyer (R-Missouri) discussed the importance of establishing NARAB and appointing its board. Later in the hearing, Rep. Keith Rothfus (R-Pennsylvania) asked Michael McRaith for an update on the board appointments for NARAB. While McRaith did not provide an exact timeline for the appointments, he did say the White House is in the process of vetting potential appointees and would like to complete the process as soon as possible.

Rep. Bill Posey (R-Florida) also asked Huff about H.R. 1478, the “Policyholder Protection Act.” The Big “I” is very supportive of this bill, which was a topic of discussion during the association’s annual Legislative Conference in April. Huff reiterated the importance of this bill, specifically because it empowers state insurance regulators to ensure that insurer capital intended to pay the claims of insurance policyholders is protected and not subject to risk-taking elsewhere in a diversified financial services company. This common-sense legislation further reinforces the strong consumer protections contained within the state oversight model.

In a related development this week, the FIO released its third annual report on the insurance industry as required by Dodd-Frank. The report provides overview and analysis of the financial performance and condition of the key U.S. insurance industry sectors, including life-health and property-casualty. The report also examines many domestic insurance issues, including affordability of insurance across different economic sectors, and highlights a number of international regulatory developments.  

Jen McPhillips is Big “I” senior director of federal government affairs. Wyatt Stewart is Big “I” director of federal government affairs.