Members of the insurance industry are applauding an amendment to the Consumer Financial Protection Agency Act of 2009 that eliminates a section that would have given the agency oversight of some insurance products.
Members of the insurance industry are applauding an amendment to the Consumer Financial Protection Agency Act of 2009 that eliminates a section that would have given the agency oversight of some insurance products.
The House Financial Services Committee green-lighted the amendment, which was proposed by Reps. Gwen Moore, D-Wis., and Erik Paulsen, R-Minn. It denies the CFPA the authority to regulate credit, mortgage and title insurers.
Currently, state insurance regulators have oversight of those carriers. Under the original act, the CFPA would have had oversight on credit, title and mortgage insurance products.
Trade associations and insurance agents’ advocacy groups have applauded the news as well as the fact that the amendment clearly draws boundaries around life insurance and annuity products.
“We’ve been trying to make the case of the importance of clarifying the business of insurance, excluding lines of insurance from coverage with the CFPA,” said Chris Morten, vice president of legislative affairs at the Association for Advanced Life Underwriting. “We’re pleased with the passage of the amendment.”
The amendment “brings us one step closer to protecting consumers, while allowing the industry to provide the best products in the most timely fashion,” said Cathy Weatherford, president and chief executive of the Insured Retirement Institute, which represents variable-annuity providers.
The language introduced this week aims to allow the CFPA to use its authority over lenders to keep predatory insurance products away from consumers, and it clarifies the definition of “business of insurance as a financial activity.”
“We simply do not need to institute duplicative policies,” Ms. Moore said in a statement. “Furthermore, this bill is not intended to regulate insurers; it is meant to protect consumers in their relationships with lenders and credit providers.”
Whit Cornman, spokesman for the American Council of Life Insurers, also hailed the changes.
"We have always maintained that for the life insurance industry, effective consumer protections require that solvency regulation and product design reside with the same regulator,” he said. “Rep. Moore's amendment is recognition of this need and of the protections that are already in place for life insurance consumers."
