Life Insurers, P&C Insurers Clash Over International Standards Bill

"NAMIC has long expressed concern that negotiations at the International Association of Insurance Supervisors aimed at creating regulatory uniformity across global borders could conflict with and undermine the regulatory structure that has served U.S. consumers for more than 150 years," the group said in a statement.

The American Council of Life Insurers (ACLI) has joined with the Reinsurance Association of America (RAA) — a group that represents both life and P&C reinsurers — to oppose the bill.

The ACLI and RAA said in a letter sent to Duffy and Heck last week that they respect the state-based U.S. insurance regulatory system but believe the proposed H.R. 4537 restrictions on U.S. standards negotiators would be too rigid.

"We believe, if enacted, the bill would hinder the U.S. industry's ability to compete internationally and protect itself from future threats," the ACLI and RAA said, according to a copy of the letter provided by Rep. Ed Royce, R-Calif. "We look forward to continuing to work with you on a bill that our associations can support."

Royce, a lawmaker who is retiring at the end of the year, has long argued that state insurance regulators have no good mechanism they can use to coordinate their activities quickly.

Royce has also argued that state insurance regulator efforts to use the National Association of Insurance Commissioners to coordinate their activities give the NAIC — a group for insurance regulators — more ability to shape insurance rules than a private corporation should have.

Royce said in a statement released Monday that H.R. 4537 is unconstitutional and anti-competitive.

Supporters of the bill, including many state insurance regulators, "appear more interested in winning an imaginary turf war than in acting in the best interests of U.S. consumers," Royce said. "Fifty-plus state regulators and their trade association simply do not have the authority or capacity to engage in international negotiations in a global economy."

Congress should instead work to help the Federal Insurance Office, an agency created by the Dodd-Frank Act, provide a strong, consistent U.S. voice in international insurance arenas, Royce said.

"H.R. 4537 does the opposite; undermining our ability to work and act together internationally to promote and defend the U.S. system of insurance regulation," Royce said.

— Read Royce Defends FIO, Questions NAIC's Credibility, on ThinkAdvisor.

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