Policyholder Protection Act of 2015

Floor Speech

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Mr. SHERMAN. I thank the gentlewoman for yielding.

Mr. Speaker, it has been a pleasure to work with the gentleman from Florida on this bill. I was pleased to join him in introducing this legislation.

This is a commonsense bill. It has, I believe, total support. We voted on it in committee. It was supported unanimously. It has no objection from any of the regulators, such as the FDIC, or others.

It is supported by most insurance commissioners all over the country, including Dave Jones, Insurance Commissioner in California. It is supported by the American Council of Life Insurers, Property Casualty Insurers, and the Big I. So this bill has industry and the regulators behind it, Democrats and Republicans. It is unanimous.

What does the bill do? It deals with the circumstance where you have an insurance company that is a subsidiary of a financial services holding company, and it basically lays out the principle that the assets of the insurance company are there to pay insurance claims.

The State regulator of the insurance company regulates that insurance subsidiary and makes sure that the assets are there to provide insurance reserves and to pay insurance claims. Those assets cannot be invaded to pay for bad bets made by affiliated companies.

So, first, the bill says that State-regulated insurance company resources cannot be used as a source of strength for an affiliated financial firm that is being liquidated under title II of Dodd-Frank.

Second, the financial regulator may not place a lien on the assets of the State-regulated insurance company under title II unless the State insurance commissioner consents. It is the State insurance commissioner's

fundamental duty to protect the policyholders.

Finally, the State insurance commissioner has the primary authority to determine whether to liquidate or rehabilitate insurance companies.

The insurance commissioners did an excellent job during the meltdown of 2008 to make sure that policyholders were paid. This bill reaffirms that the State regulators have the ability to wall off insurance company assets to protect policyholders. The bill will make sure that those assets are not jeopardized by complex bets, risk-taking, or poor management of affiliated companies.

In a nutshell, we want to make sure that those who have insurance feel secure. This bill will do that.

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