January 19, 2010

The Rise And Fall Of The Federal Insurance Office

Law 360
David P. Sofge
Banking and Finance and Insurance Partner Thomas Morante and David Sofge, Senior Counsel in the Financial Services Practice Group, co-authored a Law 360 article titled "The Rise And Fall Of The Federal Insurance Office."

The article traces the demise of recent pushes for radical insurance reform by tracking the trajectory of proposals relating to the establishment of a federal insurance regulation agency. As the financial crisis intensified from mid-2008 forward, the system of state-based regulation appeared more vulnerable than ever before, and dramatic change in the landscape of financial regulation was predicted. Many ambitions centered on a new federal agency to regulate insurers, encompassing the negotiation of international agreements, a role in consumer protection, and even the issuance of federal insurance charters.

After months of proposals and amendments, however, it now appears that the movement for radical reform has crested without reaching its objective, and insurance reform, if it comes, will be mild. An Office of National Insurance or Federal Insurance Office may yet come to fruition, but any new federal agency that emerges will have been stripped of meaningful power and authority. If or when there are markups to reconcile the House and Senate bills, it is likely that an information-gathering entity would result. Thus, after a rousing start, the drive for reform of the insurance regulatory landscape appears to have once again foundered, leaving the defenders of state primacy in possession of the field. To read the full article, please visit the link below. 

Related Insights