For Immediate Release
April 3, 2009
Contact: Chris Whatley or Michael Smith
CSG Washington, D.C., office
States Oppose Federal Takeover of Insurance Regulation
April 3, 2009 — The Council of State Governments and two other state service organizations sent Congressional leaders a joint letter Friday asking them to reject creation of a federal system of insurance regulation that would undermine existing state regulatory powers.
CSG, along with the National Conference of State Legislators and the National Conference of Insurance Legislators, strongly oppose the creation of an optional federal charter for insurance.
“State insurance regulation was not a factor in the economic downturn and should not be swept into any proposed financial services overhaul,” the letter states. “State-based regulation continues to safeguard American policyholders and industry.”
According to the letter dated April 2, a federal system of regulation would replace state oversight with a regulatory structure similar to that of the failed banking industry.
By undermining state regulation, the federal system would jeopardize state budgets and jobs. “State insurance fees, assessments and premium tax revenue—which total around $16 billion nationwide—are used to fund state insurance departments and state general funds, which support key priorities, including health care, education and infrastructure,” the letter said.
A federal system would also threaten modernization efforts by the states, which includes the Interstate Insurance Product Regulation Compact that provides a one-stop process for life insurance product approval in 34 jurisdictions and growing.
Signing the letter on behalf of their respective organizations were Idaho Sen. Bart Davis, CSG chair, New York Sen. James L. Seward, NCOIL president, and Wisconsin Rep. Phil Montgomery, NCSL chair of the Committee on Communications, Financial Services and Interstate Commerce.
The Council of State Governments is our nation’s only organization serving all three branches of state government. CSG is a region-based forum that fosters the exchange of insights and ideas to help state officials shape public policy. This offers unparalleled regional, national and international opportunities to network, develop leaders, collaborate and create problem-solving partnerships.