06-R 348

2006 -- H 7779 SUBSTITUTE A

Enacted 06/23/06

J O I N T R E S O L U T I O N

IN OPPOSITION TO FEDERAL PREEMPTIVE INSURANCE REGULATORY MEASURES

Introduced By: Representatives Kennedy, Lewiss, Shanley, Lally, and Lima

Date Introduced: February 28, 2006

     WHEREAS, Regulation, oversight, and consumer protection have traditionally and

historically been powers reserved to state governments under the McCarran-Ferguson Act of

1945; and

     WHEREAS, State legislatures are more responsive to the needs of their constituents and

the need for insurance products and regulation to meet their state's unique market demands; and

     WHEREAS, Many states, including Rhode Island, have recently enacted and amended

state insurance laws to modernize market regulation and provide insurers with greater ability to

respond to changes in market conditions; and

     WHEREAS, State legislators, the National Conference of Insurance Legislators, and the

National Association of Insurance Commissioners continue to address uniformity issues between

states by the adoption of model laws that address uniformity issues between states by the

adoption of model laws that address market conduct, product approval, agent licensing, and rate-

deregulation; and

     WHEREAS, Initiatives are being contemplated by certain members of the United States

Congress that would destroy the state system of insurance regulation and create unwieldy and

inaccessible federal bureaucracies – all without consumer demand; and

     WHEREAS, Many state governments derive general revenue dollars from the regulation

of the business of insurance, including $51,732,000 from total revenues generated in 2003 for the

State of Rhode Island budget according to the United States department of Commerce Bureau of

Census and the National Association of Insurance Commissioner's 2003 budget, not including

state licensing fees, employment taxes and other business fees and taxes paid to the state of

Rhode Island by insurers; and

     WHEREAS, These initiatives would eventually draw premium taxes and general

revenues from the states; and

     WHEREAS, Such initiatives include optional federal charter proposals that would

bifurcate insurance regulation and allow companies to evade important state consumer

protections and the State Modernization and Regulatory Transparency (SMART) Act, which

would create mandatory federal insurance standards preempting Rhode Island state law; now,

therefore be it

     RESOLVED, That the General Assembly of the state of Rhode Island and Providence

Plantations hereby expresses its strong opposition to such federal legislation that would threaten

the power of state legislators, governors, insurance commissioners, and attorney generals to

oversee, regulate and investigate the business of insurance, and to protect consumers; and be it

further

     RESOLVED, That the Secretary of State be and he hereby is authorized and directed to

transmit duly certified copies of this resolution to the members of Rhode Island's United States

House and Senate Congressional delegation in Washington DC, the members of the United States

House of Representatives Committee on Financial Services, and the United States Senate

Committee on Banking, Housing and Urban Affairs.

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LC02602/SUB A

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