By Silla Brush - 05/12/10 07:46 PM EDT
A top European Union lawmaker is urging the Senate to pass financial legislation with strong power for the federal government to preempt state insurance regulations.
Peter Skinner, a member of the European Parliament who focuses on financial issues, wrote to senators encouraging them to support a federal Office of National Insurance (ONI) that has strong power to agree to international insurance agreements.
"It is vital the insurance office be allowed to conclude necessary agreements in the insurance field," Skinner wrote to Senate Banking Committee Chairman Chris Dodd (D-Conn.). "Efforts to weaken the authority of the office seriously jeopardises the possibility of the USA being recognised within the international sphere for purposes of equivalence.
"I urge you to preserve the preemption authority of the insurance office," Skinner wrote.
Sen. Jeff Merkley (D-Ore.) is sponsoring an amendment to the financial overhaul that would preserve the current state-based system of insurance regulation. Consumer advocacy groups, including Consumer Watchdog and U.S. Public Interest Research Group (PIRG), support the Merkley amendment. Skinner did not refer to the Merkley amendment specifically.
The National Association of Insurance Commissioners (NAIC) also supports the Merkley amendment.
Some insurance financial and insurance trade associations oppose the Merkley amendment and favor the current Dodd bill. The associations include the Financial Services Roundtable, American Insurance Association and American Council of Life Insurers, among others.