Rep. Heck Sends Bipartisan Letter to Secretary Mnuchin Urging Secretary Mnuchin to Protect U.S. State-Based Insurance Regulation
WASHINGTON, D.C. – This week, Reps. Denny Heck (WA-10), Lee Zeldin (NY-1), Brad Sherman (CA-30), Bill Foster (IL-11), Madeleine Dean (PA-4) and William Timmons (SC-4) sent a letter to Treasury Secretary Steven Mnuchin, urging him to continue their efforts to protect state-based insurance regulation in their work on the international capital standard (ICS).
This letter commends the U.S. Department of the Treasury and the Federal Insurance Office for their work with the Federal Reserve Board of Governors and state insurance regulators to protect state-based insurance regulation. It also raises concerns with the disruption of COVID-19 and resulting difficulties for the ICS monitoring period. Specifically, this letter urges Treasury to extend the ICS monitoring period by one year, and to prioritize recognition of the U.S. Aggregation Method (AM) as outcome-equivalent to the ICS.
“We need to continue to fight for our state-based system for insurance regulation, which has protected American consumers for more than 150 years,” said Rep. Heck. “When international agreements cover insurance, they must involve our primary insurance regulators, and that is the states. We must work to preserve America’s proven insurance model and come together to regulatory standards that could disrupt our marketplace.”
“The American version of state-based insurance regulation has proven to be adaptable, accessible, and effective because each state is allowed to adopt laws and regulations tailored to the unique needs of its consumers,” said Rep. Budd. That’s why we must continue to push back against the one-size fits all International Capital Standard. We should not let Europe regulate America’s insurance industry.”
In the U.S., the primary regulators of insurance companies are state insurance commissioners. Their regulation has enabled the development of a robust and innovative insurance market, and entities regulated by state insurance commissioners weathered the 2008 global financial crisis far more easily than entities with primary federal regulators. However, state-based regulation presents a challenge when it comes to international negotiations on financial regulations, where national governments typically take the lead role. This letter maintains the position that international agreements on insurance regulation must reflect and protect the existing U.S. system of state-based insurance regulation and remain consistent with U.S. federal and state insurance laws and regulations.
The letter is viewable here.