08-R346

2008 -- H 7510

Enacted 07/05/08

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

IN OPPOSITION TO THE NATIONAL INSURANCE ACT OF 2007

Introduced By: Representatives Kennedy, Lewiss, Shanley, Church, and Picard

Date Introduced: February 26, 2008

     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 legislatures, the National Conference of Insurance Legislators

(NCOIL), the National Association of Insurance Commissioners (NAIC), and the National

Conference of State Legislatures (NCSL) continue to address uniformity issues between states by

the adoption of model laws that address market conduct, product approval, agent and company

licensing and rate deregulation; and

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

Congress that have the potential to destroy the state system of insurance regulation and create an

unwieldy and inaccessible federal bureaucracy, all without consumer and constituent demand;

and

     WHEREAS, Such initiatives include S. 40/H.R. 3200, the National Insurance Act of

2007 proposed optional federal charter legislation that would bifurcate insurance regulation and

result in a quagmire of federal and state directives that would promote ambiguity and confusion;

and

     WHEREAS, S. 40/H.R. 3200 would allow companies to opt out of state insurance

regulatory oversight and evade important state consumer protections; and

     WHEREAS, The mechanism set up under S. 40/H.R. 3200 does not, and cannot by its

very nature, respond, as state regulation does, to states' individual and unique insurance markets

and constituent concerns; and

     WHEREAS, S. 40/H.R. 3200 has the potential to compromise state guaranty fund

coverage, and employers could end up absorbing losses otherwise covered by these safety nets for

businesses affected by insolvencies; and

     WHEREAS, S. 40/H.R. 3200 would ultimately impose the costs of a new and needless

federal bureaucracy upon businesses and the public; and

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

of the business of insurance, including nearly $14 billion in premium taxes generated in 2007 of

which the State of Rhode Island generated $48 million in premium taxes and $6 million in other

fees; and

     WHEREAS, S. 40/H.R. 3200 does not fully guarantee state premium tax revenues for a

long-term period of time and has the potential to draw premium tax revenue from the states; now,

therefore be it

     RESOLVED, That the Rhode Island General Assembly joins the National Conference of

Insurance Legislators in expressing its strong opposition to S. 40/H.R. 3200 and any other such

federal legislation that would threaten the power of state legislatures, governors, insurance

commissioners, and attorneys 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 the Rhode Island United States

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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LC02158

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