Federal Insurance
Regulation
November 13, 2007
CAS Annual Meeting, Chicago, Illinois
S. 40 / H.R. 3200



Provides option for P&C and Life insurers to
obtain a federal charter and be federally
regulated
Federal option to be available for agents and
brokers as well, but not for Health insurers
Federally chartered insurers can choose to
switch back to a state license
S. 40 / H.R. 3200




Establishes Office of National Insurance in the
Treasury Department
Commissioner of National Insurance appointed
by the President for a five-year term
Office of National Insurance will have six
branch offices
Office of National Insurance funded by
National Insurers
S. 40 / H.R. 3200


P&C insurers not subject to rate or price
regulation; forms must be available for
inspection
Lack of rate and price regulation means
McCarran-Ferguson limited anti-trust exemption
no longer applies
S. 40 / H.R. 3200


Legislation covers many aspects of the business
of insurance, including financial regulation,
market conduct, unfair trade practices,
receivership and liquidation, and mergers and
acquisitions
In many areas, the Commission is directed to
start with NAIC model laws and regulations
S. 40 / H.R. 3200




National insurers still pay state premium taxes
They participate in state guaranty funds as long
as they meet “safety and soundness” standards
They must follow state “compulsory coverage”
laws and must participate in state residual
market mechanisms, but the state cannot
prescribe the prices charged
They must participate in state mandated
statistical or advisory organizations
S. 40 / H.R. 3200


Insurer choosing to remain state-licensed
continues its rights and obligations in the state
system as if the federal system did not exist
The bill does federalize certain aspects of
surplus lines insurance to eliminate multi-state
premium tax issues
Federal Insurance Regulation




Neil Alldredge, Vice President-State &
Regulatory Affairs, NAMIC
Deirdre Manna, Vice President, Industry &
Regulatory Affairs, PCI
J. Kevin A. McKechnie, Executive Director,
ABIA
Michael McRaith, Director, Illinois Division of
Insurance
Casualty Actuarial Society
1100 North Glebe Road, Suite 600
Arlington, Virginia 22201
www.casact.org