Sen. Jeff Merkley (D-Ore.) is leading an effort to ensure state insurance regulators keep strong powers under Wall Street overhaul legislation
Buried in the 1,400-page bill to revamp the financial regulatory system is a provision to create a new Office of National Insurance to monitor insurers at the federal level.
Merkley is concerned the measure, drafted by Senate Banking Committee Chairman Chris Dodd (D-Conn.), would give the federal government too much power to negotiate international insurance agreements that could then preempt state regulations. Merkley is supporting an amendment that would limit those federal powers and ensure states keep their powers over the industry.
The amendment would give more power for Congress to consult on international insurance agreements, said Julie Edwards, Merkley’s spokeswoman. The House reached a similar agreement last year before passing the Wall Street overhaul in December.
“State laws protecting their citizens shouldn’t be voided in order to give special treatment to foreign companies, and this amendment will make sure they won’t be,” Edwards said.
Consumer Watchdog, U.S. PIRG (Public Interest Research Group), Public Citizen and the powerful National Association of Insurance Commissioners (NAIC) are backing Merkley’s amendment and calling on senators to change the Dodd bill. A spokeswoman for Dodd did not respond to a request for comment.
“We don’t believe that a provision which would in effect deregulate state insurance protections should be part of the regulatory package,” said Carmen Balber, of Consumer Watchdog.