Legislation introduced in April would create a national insurance regulatory system. H.R. 1880, the National Insurance Consumer Protection and Regulatory Modernization Act, would establish the position of national insurance commissioner, who would be appointed by the president and serve for a term of five years within the Treasury Department. The commissioner would oversee the organization, incorporation, operation, regulation and supervision of national insurers and national insurance agencies, issue charters and licenses and regulate and supervise national insurance producers.
Individual states have long held the responsibility of licensing and regulating the insurance companies and producers doing business within their borders. However, some insurers support a system of federal oversight, saying that having 51 different sets of regulations makes doing business more difficult. Others say that doing away with the state system would remove important consumer protections. As proposed, HR 1880 would make federal chartering optional, creating a dual state/federal regulatory system, similar to the system for banks.
Congress has considered similar proposals in the past; we will keep you informed of significant developments and what they could mean to your insurance program.