Washington In Focus
tees with jurisdiction over this topic have held hearings in the last year. Most recently, on July 29, the Senate Banking, Housing and Urban Affairs Committee
held a hearing about optional federal charter and state insurance regulation.
Both Chairman Dodd (D-CT) and Ranking Member Shelby (R-AL) expressed
some degree of support for proposals that do not address health insurance during the hearing.
NAHU continues to monitor this issue very closely, as we oppose an optional
federal charter system due to consumer-protection concerns and concerns that
this could represent a slippery slope towards a federal single-payer structure.
Increased Regulatory Authority for the Department of the Treasury
A related idea is creating a national insurance division within the
Department of the Treasury. In its federal financial services modernization recommendations released last March, in addition to calling for the creation of an
optional federal charter for insurance companies, the Department of Treasury
suggested creating an Office of National Insurance. There is also legislation currently pending in Congress to that end. H.R. 5840, the Insurance Information
Act of 2008, which was introduced by Representative Paul Kanjorski (D-PA),
would give new regulatory powers to the Secretary of the Treasury regarding all
lines of insurance, except health insurance, and would create an Office of
Insurance Information within the Department of the Treasury. This bill was
passed out of the House Committee on Financial Services Subcommittee on
Capital Markets, Insurance and Government-Sponsored Enterprises on July 9
and may receive consideration by the full House after the August recess. NAHU
has similar concerns about this measure.
NARAB II Proposal
On the same day that it approved the Office of Insurance Information bill, the
House Committee on Financial Services Subcommittee on Capital Markets,
Insurance and Government-Sponsored Enterprises also approved another measure by Representative Kanjorski, H.R. 5611, the National Association of
Registered Agents and Brokers Reform Act of 2008. Known by many as the
NARAB II bill, this measure would revive plans to establish a national producer
licensing organization.
More specifically, the act calls for the creation of a private, self-regulatory,
non-profit entity—the National Association of Registered Agents and Brokers
(NARAB)—led by a board consisting of six state insurance regulators and five
marketplace representatives. The legislation, as currently drafted, would not include representation by NAHU and other key agent groups like PIA. NARAB
would oversee non-resident producer licensing nationwide.
The legislation moved forward surprisingly when the National Association of
Insurance Commissioners (NAIC) switched its long-standing opposition to the
measure when an amendment was made preserving state licensing revenue and
increasing the number of insurance commissioners on the NARAB board.
NAHU opposes this legislation, as drafted, because of its encroachment on
state-based regulation of insurance and consumer protections, which we believe
could represent the beginning of a slippery slope toward a single-payer system.
In addition, we have concerns about the bill’s potential impact on the existing
National Insurance Producer Registry, of which NAHU is a voting member of
the Board of Trustees.
NAHU’s Views and Actions
Of all the lines of insurance sold, health insurance products are already subject to the most federal regulation. Millions of Americans have health insurance
coverage that is subject to at least partial federal regulation, including federal
