WASHINGTON, D.C.— The U.S. Senate Committee on Banking, Housing and Urban Affairs has held two hearings this month to consider perspectives on insurance regulation and reforms. The Senate Committee on Banking, Housing and Urban Affairs has been debating insurance regulation legislation, Senate Bill 2509, introduced by Sens. Tim Johnson, D-S.D., and John Sununu, R-N.H. If passed, S. 2509 will allow businesses to choose whether to be regulated by a state or federal government agency. Present to testify at the most recent hearing were: the Honorable Randal K. Quarles, undersecretary for Domestic Finance, Department of the Treasury; Dr. Scott Harrington, Alan B. Miller professor, The Wharton School, University of Pennsylvania; and Dr. Robert W. Klein, director of the Center for Risk Management and Insurance Research, Georgia State University. Sen. Richard Shelby, R-Ala., Senate Banking Committee chairman, has not indicated whether he will move insurance reform legislation this legislative session. Quarles testified for the administration but did not endorse any specific legislation. Quarles did provide encouragement to federal reform efforts. In his statement, he said, "Our current system of insurance regulation requires modernization to meet the challenges facing the insurance industry, and financial services generally, in the 21st century. Our existing system of regulation has the potential to lead to inefficient economic outcomes (raising the cost and reducing the supply of many insurance products), deters international participation in our domestic markets (again raising costs and limiting consumer choice), creates obstacles to our own insurance firms' international expansion, and limits the ability of any one regulator to have an overview of risk in the insurance sector and its contribution to risk in the financial system more broadly." Bob Redding, the Automotive Service Association's Washington, D.C., representative, said, "Congress continues to hear from constituencies who believe the current system for regulating the insurance industry is not working. Although there are several bills being considered by this Congress, substantive reform has a long way to go and with the brevity of time may be delayed until the next Congress." To view more on the hearing and this legislation, please go to www.TakingTheHill.com. |
