Transparent Insurance Standards Act of 2016

Floor Speech

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Mr. Speaker, I would like to thank the chairman and his staff for the hard work that went into crafting this legislation, coordinating with the insurance industry and the diverse array of stakeholders and consumers.

Mr. Speaker, for about 150 years, the American insurance industry has been regulated at the State level. This has enabled the tailoring of regulations and business models to local circumstances for insurance companies of all types, structures, and sizes. This system has provided our domestic insurance industry a competitive advantage that benefits consumers and the market for insuring against risk. It is a superior model to the concentrated national champion insurance models of Europe.

Some of Dodd-Frank's policies threaten to upend this existing regulatory infrastructure by interjecting the Federal Government, and ultimately international regulators, into the oversight of the American insurance industry. Regardless of one's views on Federal oversight of insurance, I think we should all agree that Congress should have a stake in this process and engage in robust oversight of any Federal or international standards.

The Transparent Insurance Standards Act achieves just that. The legislation sets clear objectives, or rules of the road, for the Federal Insurance Office and the Federal Reserve that must be met during negotiation and, ultimately, adoption of any international insurance standards or covered agreements.

The bill ensures that State insurance commissioners or their designees are directly involved in the negotiation process; and before adoption of such an international standard, the public and Congress must have access to the final text and the opportunity to provide comments.

FIO and the Fed would be required to file reports and come before Congress twice a year to brief us on the progress and implementation.

If the standards include capital requirements, the Fed must have promulgated a domestic standard first, and this will prevent the tail wagging the dog that we have seen with other international financial standards.
These reforms and several other provisions ensure that, if the United States is going down the road of Federal and international insurance standards, the process is transparent, and Congress, the States, and the American people have a say in that process.

For these reasons, I am a proud cosponsor of this legislation, and I urge its passage.

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