Transparent Insurance Standards Act of 2016

Floor Speech

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Mr. HENSARLING. I yield myself such time as I may consume.

Mr. Speaker, today I rise in support of H.R. 5143, the Transparent Insurance Standards Act of 2016.

Introduced by my good friend and colleague, the chairman of the Housing and Insurance Subcommittee of our committee, Blaine Luetkemeyer, H.R. 5143 enhances Congress' constitutional oversight of international deliberations relating to insurance standards. Mr. Speaker, again, this is legislation which is about accountability, transparency, and oversight.

More specifically, the legislation establishes a series of requirements to be met before the Federal Insurance Office or the Federal Reserve may agree to accept, establish, enter into, or consent to the adoption of a final international insurance standard. Permit me to go into greater detail.

First, the Federal Insurance Office and the Fed must publish any proposed final standard and allow for public comment. A public comment is critical to our negotiating posture, Mr. Speaker. In so doing, the involved agencies must provide a joint analysis of the impact the standard will have on consumers and the U.S. insurance markets. Before agreeing to any international standard relating to capital, the Fed is required to first promulgate its domestic capital standard rule.

The bill makes similar requirements for negotiations concerning insurance covered agreements. It sets negotiating objectives for U.S. parties and also mandates that the Federal Insurance Office and the Fed report and testify before Congress twice annually.

Finally, H.R. 5143 ensures that the independent member with insurance expertise who sits on the Financial Stability Oversight Council, known as FSOC, is permitted to assist the FSOC in international discussions and attend meetings of international bodies where insurance standards are discussed.

Mr. Speaker, for almost 150 years, U.S. insurance companies of every type--including property-casualty, life, reinsurance, health, and auto--have been primarily regulated by our States. Congress and the States have occasionally reviewed the effectiveness of the State-based regulation of insurance and coordinated efforts to achieve greater regulatory uniformity. In 1949, Congress passed the McCarran-Ferguson Act, which confirmed the States' regulatory authority over insurance, except where Federal law expressly provides otherwise.

Mr. Speaker, this changed with the passage of the Dodd-Frank Act in 2010. Dodd-Frank changed the insurance landscape and further enlarged the Federal Government's role in the insurance industry by creating a Federal office specifically tasked with insurance matters. Dodd-Frank established the Federal Insurance Office at Treasury and charged its director with representing the interest of U.S. insurers during negotiations of international agreements.

Among other things, H.R. 5143 seeks to prevent any Federal overreach and establishes essential guardrails for the Federal Government when discussing international insurance issues abroad. The bill is not intended to bring international negotiations to any type of halt. Team USA has experienced victories at the International Association of Insurance Supervisors, and has kept Congress informed of its intent to negotiate the first of what could be many covered agreements.

However, we should not underestimate the importance of these conversations or the implications they can have on insurers and the American consumers because they need to be heard and they need to be represented.

As the leader of a Missouri-based midsized insurance company has told our committee, Mr. Speaker:

We worry about the potential negative impacts any international agreement could have on the domestic marketplace or the State-based regulatory system that has served consumer and insurance needs for more than a century.

He added:

Congress should conduct strong oversight in this area in order to protect domestic insurance markets, companies, and especially their policy holders.

Strong oversight and transparency are, indeed, absolutely essential, and that is what we get with this bill.

It is simply imperative that our States, the executive branch, and Congress work cooperatively to signify to the International Association of Insurance Supervisors, the Financial Stability Board, and to foreign governments that we will only lend our name to standards and agreements that benefit U.S. consumers. The bill we are considering today will assuredly lead us to this goal.

Again, H.R. 5143 provides greater transparency, allows for a stronger Team USA in negotiations, and sends a signal to foreign governments and international organizations that the United States will lead and not be led into bad agreements. With the greater congressional oversight the bill provides, we can ensure that any deal that is reached will be a fair deal, and a good deal, for the American people.

Again, I thank my colleague, the gentleman from Missouri (Mr. Luetkemeyer), for his leadership, yet again, on bringing an excellent bill to the House floor.

I urge my colleagues to support this important piece of legislation.
Mr. Speaker, I reserve the balance of my time.

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