On July 28, 2011, the U.S. House of Representatives Subcommittee on Insurance, Housing and Community Opportunity (subcommittee of the Committee on Financial Services) held a hearing entitled “Insurance Oversight: Policy Implications for U.S. Consumers, Businesses and Jobs.” Committee members heard from state regulators, as well as various industry executives, a consumer advocate and others, regarding topics spanning from systemic risk in the insurance sector to reform in the producer licensing system.
John Huff, Director of the Missouri Department of Insurance, Financial Institutions, and Professional Registration, and non-voting member of the Financial Stability Oversight Council (“FSOC”), provided a regulatory perspective. In his testimony, he discussed his views (and, speaking on behalf of the National Association of Insurance Commissioners (“NAIC”), of which he is also a member, the NAIC’s views) regarding the general lack of systemic risk in the insurance sector, a sentiment echoed by several other individuals providing testimony at the hearing. Director Huff also highlighted the activities of FSOC that could impact that sector, and he commented on the importance of his ability, as a member of FSOC, to consult with fellow insurance regulators on confidential matters, an issue raised in his earlier testimony before the House Committee.1 (To see our previous blog on this hearing, click here.) On this latter topic, he expressed gratitude for “significant Congressional intervention.” Director Huff also praised the recent nomination of Ray Woodall as a voting member of FSOC. (To see our previous blog on the Senate Committee hearing to consider Woodall’s nomination, click here.)
Clay Jackson, Senior Vice President and Regional Agency Manager, BB&T Cooper Love, Jackson, Thornton & Harwell, provided an industry perspective. He testified on behalf of the Independent Insurance Agents and Brokers of America and the Council of Insurance Agents and Brokers. In his testimony, he expressed concerns regarding the implementation of the surplus lines reforms enacted by Congress last year and discussed his support of the “NARAB II” proposal.2 He also discussed the need for reform of the producer licensing system, stating “[d]espite the well intentioned efforts of some in the regulatory community, the difficult truth is that sufficient progress has not been achieved and the need for effective licensing reform is greater than ever.”3
Testimony was also provided by the following individuals:
- Susan Voss, Commissioner, Iowa Insurance Division and President, National Association of Insurance Commissioners
- The Honorable Greg Wren (R-AL), Treasurer, National Conference of Insurance Legislators
- Andrew Furgatch, Chairman and CEO, Magna Carta Companies, on behalf of Property Casualty Insurers Association of America and the National Association of Mutual Insurance Companies
- Leigh Ann Pusey, President and CEO, American Insurance Association, on behalf of the Financial Services Roundtable and the American Insurance Association
- Birny Birnbaum, Executive Director, Center for Economic Justice
- Letha E. Heaton, Vice President, Marketing, Admiral Insurance Company, on behalf of National Association of Professional Surplus Lines Offices, Ltd.
- Gary Hughes, Executive Vice President & General Counsel, American Council of Life Insurers
- Eric Smith, President and CEO Americas, Swiss Re, on behalf of the Reinsurance Association of America