A bipartisan group of seven House members today sent a
letter to Treasury secretary-designate Timothy Geithner, asking him to set up an office of insurance information if he is confirmed.
“We encourage you — upon confirmation — to either create an office with the Treasury Department or assign a high-level Treasury appointee an insurance portfolio to fill a void on insurance oversight and expertise at the federal level,” said the letter.
The letter was signed by Reps. Melissa Bean, D-Ill., Ed Royce, R-Calif., Dennis Moore, D-Kan., Michael Castle, R-Del., Andrew Carson, D-Ind., John Campbell, R-Calif., and John Adler, D-N.J.
The letter said the move is a necessary “interim step” that would provide policymakers information about the insurance industry, as Congress takes up financial service regulatory reform this year.
The industry has long called for a federal presence in insurance regulation, either with an optional federal regulatory charter or an office of insurance information, which would have much more limited powers.
The risk of a systemic shock to the economy spurred government intervention to prevent the collapse of American International Group Inc. of New York, once the largest U.S. insurance company, the letter noted.
“Considering the critical role the insurance sector plays in our capital markets and the amount of taxpayer money the federal government has committed to assist U.S. insurance companies, it is disconcerting that there remains no expertise within the federal government on insurance matters,” the letter said.
Federal regulation of insurance is controversial among many insurance agents as well as state insurance regulators, who have historically had sole regulatory authority over the industry.
They argue that states are best suited to protect consumers, and many fear an office of insurance information would lead to a more powerful federal regulatory role.
