Congress Wraps Up Increased International Insurance Transparency

Last week, the US House of Representatives passed S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act. S. 2155 contains a provision to increase transparency at global insurance standard-setting regulatory forums and on any international insurance agreements. The bill also requires US negotiators to support consensus positions with state regulators in international negotiations on insurance standards. These provisions are based on the International Insurance Capital Standards Accountability Act (S. 1360), sponsored by Senators Dean Heller (R-NV) and Jon Tester (D-MT).

Specifically, the bill creates an advisory committee at the Board of Governors of the Federal Reserve System that will ensure the insurance industry, including agents and brokers, are given the opportunity to offer their expertise and advice on international capital standards and other insurance issues. The bill also mandates an annual report from the Treasury Department and the Federal Reserve concerning the activities at the International Association of Insurance Supervisors and the Financial Stability Board.

"It was important that the final bill to reform Dodd-Frank require international insurance standard-setting bodies to ensure our domestic insurance regulatory system and US consumers never take a back seat to what may be in the best interests of other countries," said Jon Gentile, vice president of government relations at the National Association of Professional Insurance Agents. "The United States has a unique state-based insurance regulatory system that must be considered during such negotiations. This provision ensures the protection of that system."

Importantly, the bill requires a report on the impacts to consumers and markets in the United States before supporting or consenting to the adoption of any final international insurance capital standard. It also allows public comment on the report.

Nat Wienecke, senior vice president of federal government relation at the Property Casualty Insurers Association of America, said, "This legislation will reinforce the primacy of the state regulation of insurance and require that US federal representatives coordinate with state insurance regulators and speak with one voice in international forums."

S. 2155 passed the Senate on March 14 and will now go to the president. President Trump is expected to sign the bill into law.