Policyholder Protection Act of 2015

Floor Speech

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Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1478) to provide for notice to, and input by, State insurance commissioners when requiring an insurance company to serve as a source of financial strength or when the Federal Deposit Insurance Corporation places a lien against an insurance company's assets, and for other purposes, as amended.

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Mr. Speaker, I yield myself 5 minutes.

Mr. Speaker, I want to thank my colleague on the Financial Services Committee, Mr. Sherman, for all of his help and support on the Policyholder Protection Act as well as the chairman and ranking member of the committee for their support.

I have devoted a great deal of time to insurance issues both as a State legislator in Florida and as a Member of Congress. For over 3 years, I have been pushing legislation to address problems that Dodd-Frank created for insurance companies and, more importantly, their policyholders.

I credit former Congresswoman Judy Biggert for bringing these issues to light and for offering a positive solution focused on protecting consumers.

After a lot of hard work, multiple hearings, drafts, redrafts, and so forth, we now have before us this bipartisan, commonsense legislation that will ensure that State regulators continue to have the tools they need to protect policyholders back home.

Mr. Speaker, insurance policyholders shouldn't be on the hook for an affiliated company's failure or financial distress. But, unfortunately, that is an all-too-real scenario under the current law.

Today, in certain circumstances, insurance assets--those set aside to pay out policyholders' claims--could be used as a source of strength to offset risky bets of an organization affiliated with the insurance company.

This practice could threaten the solvency of an insurer and undermine its ability to keep promises it makes to its customers, customers who rely on their policies to protect their families' homes, their livelihoods, and their retirement.

It is simply wrong to force middle class families to put their homeowner's or life insurance policies at risk because of bad bets that someone might have made on Wall Street. Therefore, our bill clarifies that State regulators can wall off these assets from contagion, regardless of how an insurance company is structured.

The bottom line here is that insurance policies shouldn't be raided, period, and certainly not to bail out a financial institution that made poor decisions. Consumers deserve certainty that they will be protected, which is why our bill will also require the FDIC to notify State regulators and consult with them before taking a lien on insurance company assets. In the rare event that this action is being considered, this legislation requires that the FDIC first consider the impact that taking such a lien could have on policyholders.

Taken together, these measures safeguard insurance assets and make certain that they continue to be used for their primary purpose, which is to pay out the claims of policyholders.

The Policyholder Protection Act enjoys broad support from insurance regulators, State regulators, guaranty funds, consumers representatives, and the industry.

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