Federal insurance adviser floated

Rep. Paul E. Kanjorski, D-Pa., chairman of the House Financial Services Capital Markets, Insurance and Government Sponsored Enterprises Subcommittee, today introduced legislation that would create a federal Office of Insurance Information inside the Department of the Treasury.
The bill, called the Insurance Information Act of 2008, would provide expertise on regulating the industry to Congress and the administration, he said.
“Shortly after Sept. 11, it became very clear to me that the federal government lacks the expertise it needs on insurance policy. Our experiences after Hurricane Katrina and the ongoing problems in the bond insurance marketplace have only reinforced my views,” Mr. Kanjorski said.
“The Office of Insurance Information would provide an effective way to help Congress and the federal government make better decisions regarding national and international insurance policy.”
Yesterday at a hearing before the subcommittee, insurance industry representatives debated the merits and risks of the proposed optional federal charter for insurers.
“The issue is not, as some might suggest, an issue of inadequate or excessive regulation,” Rep. Spencer Bachus, R-Ala., ranking member of the Committee on Financial Services, wrote in his opening statement.
“Rather it’s the failure of Congress and the regulators to keep up with the rapid evolution of the financial services marketplace.”
The hearing, the third in a series, reviewed a number of proposals to address insurance regulatory reform.
This new office would coordinate state insurance regulators’ responses to policy issues and be a voice of insurance policy at the Treasury Department.
While insurance is regulated at a state level, and will remain so, it is necessary to build knowledge of insurance policy in the federal government, Mr. Kanjorski said.
The Treasury Department’s recently released Blueprint for a Modernized Financial Regulatory Structure also recommends the creation of a similar office.