Senate Banking Committee
Debates Insurance Reform Legislation
Washington, D.C., July 12, 2006 — The Senate Committee on Banking, Housing and Urban Affairs held a hearing July 11 to discuss legislation introduced by Sens. Tim Johnson, D-S.D., and John Sununu, R-N.H. The controversial legislation could impact who regulates the insurance industry, which is currently controlled by the states.
As introduced, this legislation would allow companies to choose whether to be regulated by their respective state government or the federal Office of the Comptroller of the Currency. Banks function in this similar manner. A summary of the legislation can be found at the Automotive Service Association's legislative Web site, www.TakingtheHill.com.
Companies complain that conflicting state laws and regulations hinder their attempts to provide the public new products. Others believe a federal standard could obstruct stronger state insurance laws.
In past years, Rep. Richard Baker, R-La., House Financial Services Capital Markets subcommittee chairman, proposed a draft measure that would create uniformity in insurance rules and prevent some state price control but not create a federal charter.
"The Automotive Service Association supports the repeal or modification of the McCarran-Ferguson Act. ASA is concerned that there is little time for Congress to complete action on insurance reform this year. ASA is hopeful that discussions will continue in this Congress and legislation will move in the 110th Congress next year," said Bob Redding, ASA's Washington, D.C., representative.
Testifying at the July 11 hearing were:
- Honorable Alessandro Iuppa, superintendent of insurance, State of Maine, on behalf of the National Association of Insurance Commissioners
- John D. Johns, president and CEO, Protective Life Corp., on behalf of the American Council of Life Insurers
- Thomas Minkler, president, Clark-Mortenson Agency Inc., on behalf of the Independent Insurance Agents & Brokers of America
- Joseph J. Beneducci, president and COO, Fireman's Fund, on behalf of the American Insurance Association
- Jaxon A. White, president and CEO, Medmarc Insurance Group, on behalf of the Property Casualty Insurers Association of America
- Alan F. Liebowitz, president, Old Mutual (Bermuda) Ltd., on behalf of the American Bankers Insurance Association
- Robert A. Wadsworth, president and CEO, Preferred Mutual Insurance Co., on behalf of the National Association of Mutual Insurance Companies
- Travis Plunkett, legislative director, Consumer Federation of America
- Robert M. Hardy, Jr., vice president and general counsel, Investors Heritage Life Insurance Co., on behalf of the National Alliance of Life Companies
- Scott Sinder, The Scott Group, on behalf of the Council of Insurance Agents & Brokers
White, testifying for the Property and Casualty Insurers Association of America, said, "Even considering where the regulatory system stands today and of the lack of progress in reform over the past four years, PCI strongly urges Congress to move with caution in considering changes to insurance regulation. PCI supports the state regulatory system and we would like to see the state system improved. Any reform proposals must take into account that insurance is a major part of the U.S. economy and a complex market that has evolved over time. We urge careful consideration of potential unintended consequences of changes before any actions are taken."
Plunkett, of the Consumer Federation of America, critiqued insurance reform legislation now being considered before the House and the Senate. Plunkett said, "Insurers want competition alone to determine rates, they say. How about a simple repeal of the antitrust exemption in the McCarran-Ferguson Act to test their desire to compete under the same rules as normal American businesses? Another amendment to the McCarran Act we would suggest is to do what should have been done at the beginning of the delegation of authority to the states: Have the FTC and other federal agencies perform scheduled oversight of the states' regulatory performance and propose minimum standards for effective and efficient consumer protection."
Please visit www.TakingTheHill.com to view more on the hearing and the legislation.
The Automotive Service Association is the largest not-for-profit trade association of its kind dedicated to and governed by independent automotive service and repair professionals. ASA serves an international membership base that includes numerous affiliate, state and chapter groups from both the mechanical and collision repair segments of the automotive service industry. ASA's headquarters is in Bedford, Texas.
ASA advances professionalism and excellence in the automotive repair industry through education, representation and member services. For additional information about ASA, including past news releases, go to www.asashop.org, or visit ASA's legislative Web site at www.TakingTheHill.com.
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