Transparent Insurance Standards Act of 2016
Floor Speech
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Mr. Speaker, I yield myself the balance of my time to close.
The gentleman who just gave testimony indicated that the secret is out. I don't think he described the secret accurately, but let me just say it is out, and, just as Mr. Hensarling said on the floor the other day, we ain't seen nothing yet. They are out to destroy Dodd-Frank, they are out to destroy the Consumer Financial Protection Bureau, and they keep coming forward, as they are doing today, to protect Wall Street.
I ask my colleagues to consider the great progress we have made since the enactment of Wall Street reform to fix the blind spots that prevented our regulators from seeing the big picture. Our U.S. financial system is increasingly complex, and the regulatory structure for the oversight of our system was fragmented before the financial crisis. This was particularly true of the insurance industry, which is regulated primarily by the States.
While our State-based system for insurance regulation has many strengths, by its very nature, it is ill-suited to address all of the issues related to large, globally active insurance companies. That is why Dodd-Frank, while continuing to recognize the primacy of State- based regulation, changed many of the ways in which the insurance industry is supervised for consolidated supervision and enhanced regulation.
If we take a look at AIG, of course, one cannot help but ask: What State regulated AIG; and why did we get into the problem that we got into with AIG? It was because of its London-based operation. That is why it is so important to have cooperation between the countries on these big insurance companies that are operating all over the world.
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Let's remind everyone what this bill really does. It takes us backward. It says: forget about examining systemic risks across jurisdictions, and, instead, let's continue to leave the largest internationally active insurers in the world off the hook for any risk they may pose to our economy. Not the small, domestic insurers that engage in traditional activities, not the companies that make up such an important part of our economy in rural areas, and certainly not the insurers that had absolutely nothing to do with the financial crisis.
We are talking about the biggest and most complex insurers that have operations all over the globe and pose risks to international financial stability. This bill is not about transparency, as its title would suggest. It is about weakening oversight of these large firms and making it virtually impossible to agree to any kind of international insurance standard. This bill is also not about protecting policyholders. It is about burying our head in the sand and going back to the precrisis days where all of us, including policyholders, were vulnerable to a systemic failure. So let's call this bill what it is. It is a giveaway to the insurance
industry that is trying to escape more oversight. And let's not pretend that this bill would ensure a more unified U.S. posture on the international stage because, under the provisions of this bill, the U.S. will be severely crippled in its ability to negotiate on these issues, which means that the rest of the world will move forward while American interests get left behind.
What are we talking about? We are talking about capitalization. And if we are not willing to engage with other countries in this international community about these big insurance companies that are operating all over the world about capital standards, we are putting our own country at risk. The administration has already issued a strong veto threat for all of these reasons. For these reasons, I urge my colleagues to vote ``no'' on this bill.
Let me share with you exactly what the administration is saying. ``The restrictions that this legislation seeks to place on United States representatives in international insurance matters under H.R.
5143 would raise serious constitutional concerns and severely outweigh
any potential attendant benefits. . . .
``FIO, the Federal Reserve, and state insurance commissioners are all actively engaged at the IAIS and regularly coordinate with one another, ensuring that each aspect of the unique United States regulatory regime is adequately represented in any international negotiation. Despite their effective coordination and extensive work thus far to improve global insurance regulation, the restrictions which H.R. 5143 seeks to impose would stop this work in its tracks and would put in place cumbersome and counterproductive requirements. . . . ``Because this legislation seeks to tie the hands of U.S. representatives, in an unconstitutional manner, and prevent them from effectively negotiating on international insurance matters, the Administration strongly opposes H.R. 5143.''
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Mr. Speaker, this amendment requires that any final standard agreed to under the terms of this bill be composed in plain writing in accordance with the Plain Writing Act of 2010. That law basically requires that Federal agencies use ``clear government communication that the public can understand and use.'' As a matter of general policy, I think that makes good sense. We want the public to be able to understand the rules and regulations that impact their daily lives. When government regulations are difficult to comprehend, it undermines rather than enhances our goal of setting clear rules of the road and preventing misconduct. But no amount of clear communication or plain writing will improve the basic issues with the underlying bill.
Of course we support plain writing. I wish that all of us would adopt and carry out and implement the legislation that was passed, supported by both sides of the aisle, for plain writing, for plain English. I wish the State would do it with their propositions, et cetera. We all pay lip service to it, but then we come with the gobbledygook that the American public has to try and understand.
So, yes, I support plain writing. I support the public being able to understand what we do, but I don't want people to be confused. Plain writing has nothing to do with the basic issues in this underlying bill.
While I do not take issue with the amendment offered by the gentleman from Florida, I continue to urge my colleagues to oppose this bill. It is a solution in search of a problem, one that certainly does not exist.
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