We are now at the halfway point in PIA’s annual Political Involvement and Advocacy Month. As we have been reporting to you, this year our advocacy is more important because of the threat posed to Main Street insurance agents by the “big boys”: big banks, big securities firms and a handful of major carriers. These entities want Congress to vote them a special advantage over their competitors – Main Street agents – in the insurance marketplace.

In the past weeks, PIA has brought to light the true intentions of the backers of the Insurance Information Act of 2008 (H.R. 5840).

This legislation has been presented as narrow and limited. But by the time this bill emerged from the House Capital Markets Subcommittee on July 8, it had been significantly altered. What began as a bill to set up an insurance information office and deal with relatively narrow concerns regarding international treaties is now a bill that effectively puts the U.S. Treasury Secretary in charge of most insurance matters in the country.

• Under H.R. 5840, Congress grants new powers to the Secretary of the Treasury, making the Secretary the principal federal authority for domestic and international insurance issues of national interest with the power to determine which state laws, regulations and industry practices will be preempted.
• H.R. 5840 effectively guts the McCarran-Ferguson Act of 1945 and the Gramm-Leach-Bliley Act of 1999, which establish and affirm that the states are the regulators of the business of insurance.

H.R. 5840 is a bill to enable federal regulation of insurance.

The bill’s supporters are busy trying to convince everyone that it is actually a narrow bill that does not pose a threat to the authority of the States in insurance regulation. But that is not reflected in the language of the bill.

“This is no longer a bill that is only about creating an insurance information office,” said PIA National President-elect Kenneth R. Auerbach, Esq. “The current version of this bill would effectively lay open to review and approval by the Secretary of the Treasury the laws and practices of all 55 United States jurisdictions in most matters relating to insurance.”

What It Means to Agents:  The Office of Insurance Information is being used as a “cover” for what is really going on. The OII is a vehicle to enable creation of the initial federal insurance regulatory infrastructure and authority that, once it is established, can be rapidly transformed into the office of a federal insurance regulator.

This is why OII supporters are so anxious to ram H.R. 5840 through Congress without further deliberation or discussion soon after Congress re-convenes in September. They want to get it through before too many people realize what is actually happening!

The more scrutiny H.R. 5840 receives, the more likely members of Congress will realize that this bill is not what its supporters say it is.

This is the message that PIA members across the country are taking to their members of Congress during in-district visits during the month of August. Scores of visits have already taken place.

PIA’s action against this bad bill will extend into September, when Congress will come back into a session expected to last just a few weeks. If we can stop H.R. 5840 during this short period, we will have turned back a direct threat to our state Departments of Insurance and to Main Street insurance agents across the country.

PIA Sends Letters to DOIs, Members of Congress (MarketWatch 8/11/08)

PIA’s Letter to Congress (PDF)

PIA’s Letter to State Insurance Commissioners (PDF)

August 19, 2008