Late in 2016, PIA National issued a
press release calling for the
repeal of the Federal Insurance Office (FIO). With Congress poised to
significantly roll back key provisions of the Dodd-Frank Wall Street Reform and Consumer
Protection Act, the time is right to include a full repeal of the FIO as part of any financial
regulatory reform package.
The main vehicle for rolling back Dodd-Frank is the Financial CHOICE Act, sponsored by House
Financial Services Committee chairman Jeb Hensarling (R-TX) last Congress, which passed the
committee in September. With the start of a new Congress all legislation resets, so it will
need to be introduced and go through committee process again.
Although PIA National largely supports the sections of the bill that would scale back Dodd-Frank,
we have serious concerns about the provision that would create a new federal office called the
Independent Insurance Advocate. This new office—which, like the FIO, would be housed in the
Treasury Department—is expected to coordinate federal efforts on international insurance
matters, including at the International Association of Insurance Supervisors (IAIS) and in
negotiating covered agreements. As such, we are concerned that the Independent Insurance Advocate
may develop into an even stronger federal insurance entity, formalized into a position with an even
broader mandate. PIA National released a
press release on the day of the markup highlighting our problems with the
On January 3, PIA sent a
letter to Chairman Hensarling asking that the provision creating this new
federal insurance advocate office be stripped from the bill or heavily watered down. We will
continue to work with both the House and the Senate on advocating for the repeal of the FIO and
opposition to any proposal to shift its purpose to another office in the months to come.
PIA National Supported International Insurance
Bill Passes House
The Transparent Insurance Standards Act of 2016 (H.R. 5143) passed the House 239-170 on December 7,
shortly before the House adjourned for the year. Unfortunately, the Senate recessed before acting
on the bill.
H.R. 5143 seeks to increase transparency and cooperation in international negotiations and to ensure
that state insurance regulation is afforded appropriate deference in any federal or international
decision-making process. The proposed legislation enhances Congress's oversight of international
deliberations relating to insurance standards by requiring the U.S. Treasury Department and Federal
Reserve to consult with Congress and state insurance regulators represented by the National
Association of Insurance Commissioners (NAIC) before approving any international insurance standards.
The bill sets negotiating objectives for U.S. negotiators regarding international insurance standards
to ensure that the U.S. doesn't enter into an agreement that would disrupt the domestic insurance
industry. It provides that if a proposed international standard includes a capital requirement, it
would have to be consistent with federal and state requirements. The bill's provisions couldn't be
interpreted to preempt a state law.
House Financial Services Subcommittee Releases
Principles on NFIP Reauthorization
The House Financial Services subcommittee on housing and insurance, currently chaired by
U.S. Rep. Blaine Luetkemeyer (R-MO), recently released a draft blueprint to guide
reauthorization of the National Flood Insurance Program (NFIP). PIA National has been
engaged with committee staff throughout the year and is appreciative of the committee's
attention to the NFIP reauthorization so early in the process.
The draft guiding principles focus on providing market stability through a long term
reauthorization; placing NFIP on sound fiscal footing; providing consumers with choice by
growing the private flood market and eliminating the non-compete clause for Write Your Own
companies; and reforming the mitigation and mapping process.
PIA is largely optimistic about the draft guiding principles. We look forward to working with
both the House and the Senate throughout 2017 to ensure the passage of a reauthorization bill
that protects policyholders and recognizes the vital role that independent agents play in
delivering flood insurance to consumers.
Upon being sworn in on Tuesday, the Republican Congress will move quickly to repeal Obamacare.
Exactly how it will be done has yet to be determined. However, the dismantling of the law will
bring about a long battle of what to replace it with; PIA National will continue to promote the
critical role that independent agents play in the sale and servicing of health insurance.
The ACA created the medical loss ratio (MLR) requirement, which is designed to limit the
percentage of premium that a health insurance company can spend on administrative costs. The
MLR requirement was intended to ensure that consumers receive sufficient value for their healthcare
dollar; however, in the creation of the MLR requirement, agent and broker commissions were
improperly classified as administrative costs, limiting consumer access to the essential resources
of agents and brokers. To address this issue, in the last Congress, PIA National endorsed the Access
to Professional Health Insurance Advisors Act, which clarifies that producer compensation is not
part of the MLR calculation set forth in the ACA. PIA National will continue to work with the bill's
sponsor Billy Long (R-MO), to ensure that regardless of how Obamacare is replaced, agent and broker
compensation remains a priority.