Seven bipartisan members of the House of Representatives’ House Committee on Financial Services have sent a letter to U.S. Secretary of the Treasury-designate Timothy Geithner last Friday, urging him to either create an office within Treasury or assign a high-level Treasury appointee “to fill the void on insurance oversight and expertise at the federal level.” They believe that it is “imperative that Treasury have a working and dedicated knowledge base on insurance matters.”
The House members tied their request for a national insurance office to their belief that the “U.S. financial regulatory model must be reformed” and that creating such as office would be “a valuable — and indeed necessary — interim step which would provide policymakers with insight into issues surrounding the insurance market as reform is contemplated.” This request is made as the Obama Administration and Congress “begin to consider establishing a systemic risk regulator in the immediate future and changes to the regulatory structure in the upcoming months.”
Given the “critical role the insurance sector plays in our capital markets” and the amount of funds that “the federal government has committed to assist U.S. insurance companies,” the lawmakers find it “disconcerting that there remains no expertise within the federal government on insurance matters.”
The creation of an Office of Insurance Information within the U.S. Department of the Treasury had been a key feature of the Insurance Information Act of 2008 (HR 5840) that was introduced in the House of Representatives during the last session of Congress. That bill had been sent to the House Financial Services Committee by the House Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises in June 2008, but the full Committee never acted on it. Nor was a companion bill ever introduced in the Senate. With the start of a new session, no new bill has yet been introduced in either the House or the Senate on this subject.
As we noted in our October 10, 2008, Legal Alert, “House Financial Services Subcommittee Approves the Insurance Information Act of 2008 to create an Office of Insurance Information,” the proposed Office of Insurance Information mirrors one of the recommendations in Treasury’s Blueprint for a Modernized Financial Regulatory Structure, also known as the Paulson Report