WASHINGTON (July 10, 2018) – The R Street Institute today expressed disappointment with the U.S. House’s approval of H.R. 4537, the International Insurance Standards Act of 2017, a measure that strips the Federal Insurance Office of its statutorily appointed role to negotiate covered insurance agreements and inappropriately delegates authority to stifle international negotiations to state officers.
Though improved from an even more problematic draft that passed the House Financial Services Committee by a 56-4 vote in December 2017, the measure remains troubling on several fronts, according to R.J. Lehmann, R Street’s director of finance, insurance and trade policy. He noted that Assistant Attorney General Stephen Boyd wrote in March that the bill potentially represents an unconstitutional usurpation of executive authority in diplomatic relations.
“As we warned House members in February, our primary concern with this legislation is that it would return us to the pre-FIO status quo, when trade negotiators seeking to advocate U.S. insurance interests abroad were limited in their ability to propose binding regulatory commitments,” Lehmann said. “The covered agreement process already has borne fruit and we see no justifiable reason to curtail the valuable policymaking tools it offers.”
Among the biggest concerns with H.R. 4537, Lehmann said, are that it reassigns duties to negotiate covered agreements from the FIO director to the Treasury secretary; commands that federal negotiators and representatives to international standards-setting bodies “closely consult [and] coordinate with…State insurance commissioners”; and that it compels reports on any proposed standard to explain how it is “consistent with and does not materially differ from or otherwise affect Federal or State laws or regulations.”
“The U.S. Supreme Court affirmed in its 2003 decision in American Insurance Association v. Garamendi that states, including their insurance commissioners, may not interfere with the president’s ability to conduct the nation’s foreign policy,” Lehmann said. “The National Association of Insurance Commissioners brings great knowledge and resources to discussions of insurance public policy. But it is, in the end, a private trade association, not a governmental body or interstate compact. It cannot displace the federal government’s role in international diplomacy, and we are confident the U.S. Senate and the White House will agree in that assessment.”