Two bills with large implications for the insurance industry have passed the
H.R. 3996, the Financial Stability Improvement Act of 2009 passed by a vote of 31-27, while H.R. 2609, the Federal Insurance Office Act of 2009 advanced by a voice vote.
Although the former is being widely hailed by insurance associations, the latter is eliciting concerns from those who feel the bill will unduly penalize insurers in the broader effort to stamp out systemic risk. H.R. 3996 establishes an inter-agency council, the Financial Services Oversight Council, which would be entrusted to regulate financial companies it deems as posing a systemic risk to the overall economy. The bill also requires firms with assets of more than $50 billion to pay into a fund designed to aid in the resolution of troubled companies.
“Put simply, by any measure suggested by members of the committee—size, interconnectedness, leverage or market share—property/casualty insurers do not fall into the category of ‘systemically significant,” Jimi Grande, SVP of federal and political affairs for the
The progress of the Financial Insurance Office Act is receiving more universal acclaim but is also raising some concerns. “Today’s vote by the House Financial Services Committee is a good first step in ensuring that the property-casualty insurance industry will finally have a voice at the national level,” said Leigh Ann Pusey, president and CEO of
The Independent
Both bills may come to the House floor for a final vote as early as next week.