Focus on TRIA will likely postpone action on SMART until the fall
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Federal Reserve Board Chairman Alan Greenspan is giving measured support to extension of the Terrorism Risk Insurance Act, another sign that momentum has swung in Washington toward an extension of the legislation.
Another signal of that shift is that the Capital Markets Subcommittee of the House Financial Services Committee has scheduled a hearing for July 27 on TRIA.
Congressional and insurance lobbyists also confirmed that introduction of legislation establishing federal standards for state insurance regulation has been postponed until fall as congressional staff and lobbying energies are focused on drafting legislation to extend TRIA.
One insurance industry lobbyist said the reason for the delay is that "action on TRIA is paramount, and the energy needed to deal with work on the extension is squeezing the oxygen out of action on the bill–the State Modernization and Regulatory Transparency Act, or SMART."
At the same time, National Underwriter has learned that two ranking members of the committee, Reps. Ed Royce, R-Calif., and Paul Kanjorski, D-Pa., have agreed to introduce an amendment to the SMART legislation that would establish an optional federal charter for life insurance companies.
However, Reps. Mike Oxley, R-Ohio, chairman of the full committee, and Richard Baker, R-La., chairman of a subcommittee, are apparently not supportive, although some members of the Senate Banking Committee are receptive, the sources said.
The SMART bill is opposed by state regulatory groups, including the National Association of Insurance Commissioners and National Conference of Insurance Legislators but strongly supported by the property/casualty industry. However, delay in introducing the bill, especially given the coming battle over a Supreme Court justice, could push action on it into next year, as well as reduce momentum for such a bill.
