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WASHINGTON—The National Conference of Insurance Legislators (NCOIL) has sent a letter to all members of the new Congress warning them that a federal insurance charter could ultimately cost states up to $16 billion in annual revenue.
The letter was sent to all members of Congress Wednesday, the opening day of the 112th Congress.
It was signed by Rep. George Keiser, R-N.D., NCOIL president.
NCOIL said what prompted the letter was the “fear” by state lawmakers “that these important funds and jobs could be lost if Congress authorizes a federal insurance charter and creates a new bureaucracy to regulate insurance.”
The letter says the insurance industry “vitally impacts our local and state economies.”
It notes that insurance fees, assessments and premium taxes account for a “significant” portion of state revenue—around $16 billion nationwide.
“These monies fund key priorities, including education, infrastructure and health care initiatives,” according to the letter.
“The insurance sector also provides thousands of jobs in state government, insurance enterprises and medical offices that support families across the country,” the letter adds.
The letter states, “NCOIL believes that state regulation is the best way to protect state citizens and promote a healthy insurance marketplace,” and that its members “look forward to working with you personally to ensure that the states’ ability to oversee our unique marketplaces is protected and that the traditional role of the states as laboratories of democracy is preserved.”
The letter “recognizes” that insurance regulation must evolve and adapt to suit an ever-expanding marketplace, and NCOIL “works to develop and promote uniform answers to national concerns.”
It notes that in response to the Dodd-Frank financial services reform law, “we have developed and are advancing in the states model legislation that fully realizes Congress’ surplus lines intentions.”
It also cites NCOIL’s efforts to promote the successful Interstate Insurance Product Regulation Compact in the states.
It adds that NCOIL finds solutions for emerging insurance issues, as “evidenced by recent NCOIL models on healthcare, retained-asset accounts, life settlements, credit-based insurance scoring, rate regulation and employee misclassification.”