House passes international insurance standards bill
However, Washington-based free market think tank The R Street Institute expressed disappointment with the bill, which it said would strip the Federal Insurance Office of its statutorily appointed role to negotiate covered insurance agreements and “inappropriately” delegate authority to stifle international negotiations to state officers.
Though improved from an “even more problematic draft” that passed the House Financial Services Committee on a 56-4 vote in December 2017, the measure remains “troubling” on several fronts, including that there is an argument that much of the bill represents an unconstitutional usurpation of executive authority in diplomatic relations, R.J. Lehmann, R Street’s director of finance, insurance and trade policy, said in a statement Tuesday.
“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,” he 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 is that the bill reassigns duties to negotiate covered agreements from the FIO director to the Treasury secretary, requires federal negotiators and representatives to international standards-setting bodies to “closely consult” and coordinate with state insurance commissioners, and compels reports on any proposed standard to explain its consistency or differences with federal or state laws or regulations, Mr. Lehmann said.
“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,” he 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.”