House Financial Services Subcommittee Issues Testimony From Shelter Insurance
"Thank you, Chairman Duffy, Ranking Member Cleaver and members of the Subcommittee for holding this important hearing on the Federal government's role in the insurance industry and for inviting me to testify today.
"My name is
"I am pleased to testify in strong support of bills that are the subject of this hearing: (1) H.R. 3861, the Federal Insurance Office Reform Act of 2017; and (2) H.R. 3762, the International Insurance Standards Act of 2017. These important bills recognize that our state-based system for insurance regulation has protected consumers and fostered competitive insurance markets for over 150 years. I am also pleased to offer some perspective on the need for
"Federal Insurance Reform Act of 2017 (H.R. 3861). The Dodd-Frank Act reaffirmed the primacy of state regulation. It also created the Federal Insurance Office (FIO), the primary value of which was to assist in the coordination of federal insurance policy and to represent the federal government in international regulatory discussions. Dodd-Frank expressly states that
"FIO's primary purpose was to provide a unified voice for the
"Dodd-Frank also granted FIO exceedingly and unusually broad subpoena powers far beyond the power granted to most other
"To ensure that FIO is primarily focused on international matters and does not inappropriately intrude on state regulatory authority, H.R. 3861 would move FIO to the
"The state insurance regulatory system has a 150 year track record of comprehensive consumer protection for insurance policyholders. The insurance sector has been stable throughout the last several financial crises, and despite a confluence in the last decade of record storms, market contractions, and regulatory changes, there have been no major recent insolvencies, the industry has achieved record levels of capitalization, and our residual markets for consumers and businesses are at or near historic lows. This suggests that overall private sector insurance availability is better than ever for consumers. H.R. 3861 would ensure that the state system will continue to extend this excellent track record unimpeded by Federal meddling. Instead, it would focus FIO on the important international functions to which it is most suited. Shelter urges the Committee and the
"International insurance Standards Act of 2017 (H.R. 3762). International insurance regulatory discussions and standard setting has greatly increased since the financial crisis and is often conducted behind closed doors, unaccountable to the public and to
"The Federal government is the functional regulator of many depository institutions, and so can speak for the
"The IAIS is not a regulatory body and in its standard-setting activities generally does not discuss confidential or company-specific information. Rather, it deliberates on best practices and potential global insurance standards in a forum where all stakeholders should be able to have a voice - similar to the process for domestic insurance standard discussions at the
"H.R. 3762 would correct this problem and assure that the
"H.R. 3762 would provide some much-needed direction and guardrails for
"
"We know that Chairman Duffy and
"Federal Reserve Board Supervision of Insurance. We also want to call the Subcommittee's attention to the need to examine the
"Unfortunately, the Dodd-Frank Act resulted in the
"In addition to the bills being discussed today, we also urge
"Conclusion
"Thank you again for your efforts to recognize and support the success of state-based insurance regulation. We strongly support the passage of H.R. 3861, and H.R. 3762, and we look forward to working with the Committee and serving as a resource as this legislation progresses."
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