DATE: MARCH 29, 2010

TO: NCOIL LEGISLATORS

FROM: NCOIL PRESIDENT REP. ROBERT DAMRON (KY)

RE: PLEASE CONTACT YOUR SENATORS REGARDING REFORM LEGISLATION

As you know, the Senate Banking Committee recently approved a Restoring American Financial Stability Act of 2010. The full Senate will likely consider the legislation after members return from their spring recess.NCOIL legislators have a prime opportunity to contact your respective Senators when they are in the states this week and next.As NCOIL President, I ask that you relay our concerns with certain key aspects of the legislation.

NCOIL has argued that the financial services package should not restructure insurance oversight—as the insurance sector remained vibrant during the financial crisis. Instead, we advocate for enhanced communication and information-sharing between state and federal regulators, which would include state participation, on an equal basis, in any systemic risk monitoring council.

Specific to the Senate bill, NCOIL has argued that:

  • the bill should strike language to create a new Office of National Insurance with authority to preempt state insurance laws/regulations
  • a new Financial Stability Oversight Council (FSOC) should not have authority to direct insurers to the Federal Reserve for heightened regulation
  • the FSOC should include state officials, particularly a state insurance regulator in place of the current “insurance expert” which, theoretically, could be a current lobbyist
  • failing insurers should continue to be liquidated through state guaranty fund systems, not through a new FDIC-based liquidation process
  • insurers should not be assessed to pay for a new federal liquidation fund
  • states must retain authority over insurance consumer protection

All of the information that you should need is linked below. A letter that I sent to the Senate Banking Committee last week, that you can feel free to modify and reuse, is attached.Please update NCOIL staff on your efforts and e-mail a copy of any letter that you may send to . NCOIL staff can also forward a copy of your letter to the Senator’s respective financial services staff.

The following information is available for your review:

  • 3/22 NCOIL letter to Senate Banking Committee (attached)
  • 3/15 NCOIL legislative alert that overviews the insurance aspects of the legislation and related NCOIL policy statements
  • 3/24 NCOIL legislative that highlights insurance changes made to the bill via Chairman Chris Dodd’s Manager’s Amendment
  • NCOIL resolution urging insurance exemptions from systemic risk regulation, federal liquidation authority, and liquidation fund assessments
  • NCOIL resolution opposing the creation of an Office of National Insurance

For more information, contact Mike Humphreys at 202-220-3014 or at .