This message was originally distributed by Public Citizen.
Buried in the 1200-page Senate financial reregulation bill we found a sneaky provision that would undermine state-level insurance consumer protections if they conflict with trade agreements! Yup, the “Office of National Insurance” (ONI) proposal would empower the Treasury Department to unilaterally override existing state insurance regulations that it deems to be out of step with international agreements. Urge your Senators to cosponsor TODAY the “Merkley amendment” which strikes these unfair trade provisions from the bill.
It is incomprehensible that, in the context of worldwide pledges to reregulate financial services and get destructive banks and insurance firms under control, any further deregulation would be considered by Congress – much less as part of Congress’ priority financial reregulation package!
Yet tucked deep in the bill designed to clean up our financial mess is this sneaky provision that establishes a new ceiling on regulation. It would undermine existing insurance consumer protections in all 50 states. How? Treasury would be newly empowered to enter into international insurance agreements without Congress voting on the pacts and without any role for the 50 state insurance commissioners now responsible for regulating these firms. And, it would then allow Treasury to overrule existing state laws that provide greater consumer protections than these undemocratic international agreements.
We don’t need a race to the bottom in insurance consumer protections! Take action now.
Why would Treasury want this new power to unilaterally write insurance regulatory policy behind closed doors? Unbelievably, it is to allow foreign insurance firms to have better access to the U.S. market – by not having to follow the same rules as U.S. companies. Hundreds of banks had to be bailed out through the Troubled Assets Relief Program (TARP) -but only three insurance firms. Yet, the ONI would grant Treasury new power to weaken the state-level insurance rules that actually worked to help foreign firms who want to operate here without complying with our laws.
This crazy proposal would make Treasury an enforcer – against U.S. states – of trade agreement and other international pacts’ requirements without a foreign country having to even initiate a challenge! Now that the cat is out of the bag, state officials, labor unions, consumer advocacy organizations1 and associations like the National Association of Insurance Commissioners2 (NAIC), National Conference of State Legislatures3 (NCSL), and National Conference of Insurance Legislators4 (NCOIL) have come out against this measure.
Thankfully Senator Jeff Merkley (D-Oregon) is leading the effort to defang this ONI lunacy. He has an amendment that fixes this mess. Senator Merkley deserves our thanks – and help!
Contact both of your Senators today and ask them to cosponsor the “Merkley amendment” so the financial reregulation bill doesn’t include a backdoor trade pact attack on the state insurance regulations that actually worked!
Thanks for all you do,
Sarah Edelman, Public Citizen’s Global Trade Watch division
1. Consumer Advocacy Organizations
2. National Association of Insurance Commissioners (NAIC)
3. National Conference of State Legislatures (NCSL)
4. National Conference of Insurance Legislators (NCOIL)