Elizabeth Warren Insurance Deregulation Amendment Raises Federal Standard For Agents
WASHINGTON-- TheSenate Banking, Housing and Urban Affairs Committee onThursday approved new bipartisan legislation to deregulate the insuranceindustry, but not before Sen. Elizabeth Warren (D-Mass.) snagged a small victory for consumers.
Thederegulation bill, authored by Sens. Jon Tester (D-Mont.) and Mike Johanns(R-Neb.), will create a new federal licensing programfor insurance agentsthat would replace the current state-by-statesystem.
Warren'samendment, her first in the banking committee, would strengthen consumer safeguardsby raising federal standardsfor the new insuranceagent license. The amendment'slanguage requires anyone who serveson the board responsiblefor establishingthe new federal licensing standardsto have "demonstrated expertise" in life insurance, health insurance, or property and casualty insurance beforebeinggranted a 50-state license. The amendment was approved with theunanimous consent of the committee.
No floor vote hasyet been scheduled for the bill.
TheConsumer Federation of America hasobjected to the proposed federal licensing on the groundsthat it would lower qualificationscurrently set by individual states. Instead of serving as a basic minimum floor for aptitude, CFA worries, thebill would create an inappropriately low ceiling: Different states have different risks, and a robust knowledge of property insurance rulesin Iowa doesnot automatically translateinto expertisein Florida hurricanesor California earthquakes. Thenew bill, however, would allow anyone licensed to sell insurancein one state to qualify automatically for a license in all 50 states, provided they meet the new federal guidelines.
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