“Preemption of state laws, if necessary, should be accomplished by legislative action, not through an administrative procedure,” said David A. Sampson, PCI’s president and CEO. “The McCarran-Ferguson Act provides that the states control insurance governance in the absence of a federal law explicitly addressing the business of insurance. If a situation is created in which an administrative procedure, not a law, can inadvertently overturn state statutes, then insurers could lose the important regulatory certainty that is provided under McCarran-Ferguson. We look forward to working with the House Financial Services Committee in the coming weeks to address this issue.”
The House Financial Services Committee was tentatively scheduled to hold a markup on H.R. 5840 and several other insurance bills Tuesday. Although the markup of this legislation has been postponed, PCI continues to work with committee members and staff to help produce the best possible legislation.
“It is very important that we continue to focus on regulatory modernization, and to ensure that this reform effort produces efficiencies and positive results without creating onerous, bureaucratic red tape,” Sampson said.
PCI’s Board of Governors has not yet taken a position on H.R. 5840, the Insurance Information Act of 2008, which would establish a federal Office of Insurance Information (OII). Sampson testified before the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises on June 10, 2008 and spoke of the importance of three issues:
• Avoiding unnecessary and expensive data collection requirements
• Preserving confidentiality of private data
• Defining and limiting federal preemptive authority over state laws
The subcommittee held a markup July 9th and added new data protection provisions and procedures for the Secretary of the Treasury to block preemption of state laws under certain specified conditions. While these are important improvements, PCI contends that preemption should be a legislative function.
About PCI
PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association.