Neugebauer on Current Legislative Proposals to Reform Domestic Insurance Policy

May 20, 2014 Issues: Financial Services

WASHINGTON, DC—Congressman Randy Neugebauer (R-TX), Chairman of the Financial Services Subcommittee on Housing and Insurance, gave the following statement at a hearing today on current legislative proposals to reform domestic insurance policy.  

“Thank you for attending this hearing examining five legislative proposals to reform domestic insurance policy.  This hearing will give many of the stakeholders in this room a much needed respite from our TRIA deliberations.

“First, I thought it would be good to give you all a brief update on where we stand on TRIA.  As many of you know, I have met with the Members on the Majority side of this Committee to unveil a draft outline that would reauthorize TRIA, but also modernize and reform the Program.  We will be working with our Members over the next two weeks to finalize that draft.  I will also sit down with our Ranking member to solicit his feedback with the hopes of working on a bipartisan basis.  From there we plan to release a draft bill with the intention of holding a mark-up in June.

“But today we turn our attention to some insurance reform legislation that focuses on protecting policyholders, offering more consumer choice for insurance products and providing regulatory relief to reduce costs to domestic policyholders.

“First, we will examine legislation that ensures that the regulations intended to rein in certain activities of large, complex financial institutions don’t trickle down to insurance companies that are properly regulated at the state level.

“H.R. 4510, which was introduced by Reps. Miller and McCarthy, would clarify the application of capital requirements to insurance companies that are subject to Fed supervision.  The bill would simply ensure that capital standards intended for banks are not needlessly applied to insurers that own financial institutions.   H.R. 605, introduced by Mr. Posey, would make certain that insurance companies are not subject to federal assessments to pay for the orderly liquidation of failed financial institutions given that state insurance laws already govern the process for unwinding failed insurers. 

“Second, we will examine legislation intended to protect insurance policyholders who are customers of a bank-affiliated insurance company.  H.R. 4557, introduced by Rep. Posey, would allow state insurance regulators to intervene to protect the soundness of an insurance company affiliated with a failing financial institution.  This would allow regulators to ring-fence insurance-specific assets so policyholders are protected in the event of an insolvency.

“Finally, the Subcommittee will examine two draft proposals intended to increase consumer choice and reduce unnecessary regulatory burdens.  The first, which is authored by Rep. Ross, would modify the Liability Risk Retention Act to allow self-insured liability risk retention groups to create efficiencies by expanding their commercial lines of coverage.  The second, authored by Rep. Stivers, would lessen the regulatory burdens associated with data requests from insurance supervisors.

“I applaud all of the sponsors of the bills we plan to examine today.  Separately, I would like to acknowledge Rep. Duffy for all of the hard work he and his staff has done on the Miller-McCarthy capital standards bill.  I look forward to a productive hearing.”