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Financial Bill Heads to Floor of Congress

WASHINGTONâ??House and Senate negotiators completed work early today on sweeping financial services legislation that includes a provision that could ultimately impose a fiduciary standard on sale of investment products. Amongst other provisions agreed to before the conferees completed work at 5:39 a.m. is one that would impose a tax on large insurance companies as well as banks and other financial services companies for 5 years.
The provision of the bill, H. 4173, would affect insurers with assets under management of more than $50 billion. It is designed to pay for the estimated $19 billion cost of the bill over 5 years. Federal regulators will assess the fee, with higher fees to be assessed on those with the riskiest assets.Staffers were expected to work through the weekend to prepare the bill for floor action, with the House expected to act early in the week and the Senate by next Friday.
The aim, which is likely to be attained, is to have the bill on President Obamaâ??s desk for signature before Congress leaves for its Independence Day recess July 2.The bill would create a Federal Insurance Office, with the authority to coordinate with the U.S. trade representative in negotiating bilateral trade agreements on insurance with foreign countriesâ??agreements that might preempt inconsistent state laws.
The office would have no regulatory authority but would have the power to monitor all activities related to the business of insurance except for group health insurance and long term care insurance. That power would rest with the Department of Health and Human Services. The final language also would require the Treasury Department to conduct a study of insurance regulation and make recommendations to Congress within 18 months. The House also added a provision requiring that the study include recommendations on the U.S. and global reinsurance markets.
The bill also contains a provision overhauling regulation of the surplus lines and reinsurance industries.A provision was also added to the bill that would add 2 two non-voting members to a proposed Financial Services Oversight Councilâ??a representative from the Federal Insurance Office and a state insurance regulator. The FSOC would be created to oversee large, potentially systemically risky financial institutions.

This entry was posted on Wednesday, June 30th, 2010 at 3:55 am and is filed under Group Health Insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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