House Members Plea for Insurance Information Office

As a step in the current American insurance industry reform, a bipartisan group of seven House members sent a letter to US Treasury Secretary Timothy Geithner last week.

The letter urging him to set up an Office of Insurance Information. The signatories on the letter of last week are congressmen from New Jersey, Delaware, Illinois, Indiana, Kansas, and California.

The letter says that it is an important “interim step” that would create information for policymakers on the insurance industry, as Congress takes up financial service regulatory reform this year. A federal office charged with monitoring the insurance market can assist the federal government in understanding and managing its operations with respect to systemic risk.

“It’s critical for Treasury and other public policy leaders to develop and institutionalize an insurance expertise at the federal level. Congress will soon debate the scope of federal regulation and whether to apply that oversight to insurers. That debate is certain to focus on the need to monitor systemic risk on a national basis. An OII would be a tremendously valuable tool for helping inform that debate.” said incoming American Insurance Association president, L.A. Pusey, who commended the legislators.

It has been said that “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 argues 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.”