A new Senate bill would let both insurers and producers choose between regulation by state insurance departments or by an Office of National Insurance.
The bill, the "National Insurance Act of 2006," S. 2509, would permit states to continue to apply some insurance laws, including laws setting minimum standards for workers' compensation insurance and motor vehicle insurance standards and laws requiring insurers to participate in "residual market" mechanisms, such as assigned risk plans and mandatory joint underwriting associations.
States also could continue to apply general state laws, including state tax laws and laws governing unclaimed property.
But the bill, which makes no mention of health insurance, would bar states from restricting the ability of state-licensed producers to sell, solicit or negotiate insurance on behalf of national insurers, according to bill summaries circulating in Washington.
Sens. John Sununu, R-N.H., and Tim Johnson, D-S.D., the bill sponsors, are preparing to introduce the bill in the Senate today.
The National Association of Insurance Commissioners, Kansas City, Mo., has opposed the idea of creating an optional federal charter, but the American Council of Life Insurers, Washington, is welcoming the Sununu-Johnson bill.
Letting insurers choose between state regulation and federal regulation "would be far more responsive to the needs of today's consumers and companies than inconsistent laws and regulations that are endemic to the current state-based system," ACLI President Frank Keating says in a statement.
The National Association of Insurance and Financial Advisors, Falls Church, Va., says it is open to consideration of regulatory reform proposals, including proposals that might create a national producer's license. But the group says it is still studying the Sununu-Johnson bill and will not make specific comments about the bill until that review is complete.
