The clouds shrouding the precise nature of the federal footprint on the insurance industry have dissipated somewhat after the Treasury department unveiled its plans for the Office of National Insurance.
Not surprisingly, the plans hew quite closely to H.R. 2609, the Insurance Information Act, sponsored by Rep. Paul Kanjorski (D.-Pa.), which posited an ONI as an repository of insurance knowledge at the federal level and a unified voice in international agreements.
"I am pleased to see that the Administration also understands the serious need for an insurance office at the federal level, as I detailed in my Insurance Information Act," said Chairman Kanjorski. "The language from my bill provided the basis for the Administration's proposed Office of National Insurance which would fill a gap in the federal government's knowledge base on financial activities.”
In addition to its advisory roles, the 8-page draft released by Treasury (Title V, Office of National Insurance) specifies ONI’s other functions including its role in filling “gaps in the regulation of insurers that could contribute to a systemic crisis in the insurance industry or the United States financial system.”
It was this perceived shift in the balance between state and federal regulators that caused initial opposition to an ONI. Eventually, Kanjorski was able to craft legislation that received support even from staunch opponents of an optional federal charter (OFC) for insurers.
Not surprisingly, proponents of a stronger regulatory federal presence in insurance were buoyed by the release.
"We all agree that the government must put in place the necessary regulations and consumer protections to safeguard and prevent future economic crises, and to fill significant regulatory gaps in its architecture,” Leigh Ann Pusey, president of the American Insurance Association, said in a statement. "Title V, the Office of National Insurance, addresses some of those key concerns, particularly as they relate to building a strong federal knowledge base on the insurance industry, and allowing the U.S. to engage authoritatively with the global community on international insurance matters.”
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