COFIR Opposes National Insurance Act of 2007

The Coalition Opposed to a Federal Insurance Regulator (COFIR) opposes S. 40, the “National Insurance Act of 2007” (NIA) introduced by Sen. John Sununu (R-N.H.) and Sen. Tim Johnson (D-S.D.)  

The insurance industry is sharply divided on the issue of a federal insurance regulator. Proponents would lead you to believe that the industry comes as a united front when, in fact, many associations and companies—and a clear majority of consumers – do not agree with efforts to create a massive new federal bureaucracy far removed from the states and from consumers.

COFIR believes that establishing a new federal bureaucracy in Washington will not benefit consumers. COFIR has conducted surveys of tens of thousands of consumers, and the overwhelming consensus is that centralizing insurance in our nation’s capital is not the answer to issues confronting the insurance marketplace.

While COFIR does not support the creation of a federal insurance regulator, we do believe the current state-based insurance regulatory system needs to be reformed and modernized. COFIR believes such reform can be achieved through targeted federal legislation, an example of which is the Nonadmitted and Reinsurance Reform Act of2007 . This bill has overwhelming Congressional and industry support. COFIR maintains that targeted legislation such as this can bring about uniformity and improve efficiencies in the state-based insurance regulatory system without taking the drastic step of creating a massive new federal bureaucracy.

COFIR believes the creation of a federal insurance regulator could risk state revenues necessary to fund a vast array of state government operations such as Medicaid and CHIP programs, public and mental health services, law enforcement, senior citizen services, and economic development programs. In 2005, state governments received almost $15 billion in state insurance premium taxes, and $2.2 billion from non-premium tax revenues (e.g. fees and assessments).

“There is no ‘crisis’ in the insurance industry. What is needed is federal leadership in targeted reforms to help states create a more efficient and uniform market in which consumers are protected and operations of state governments are not threatened,” stated Greg Wren, COFIR Executive Director.

“Creating a massive new federal bureaucracy far-removed from the states would threaten consumer protections, risk a loss of critical state revenues, dismantle the nation's 135 years of state-based insurance protections, and lead to a burdensome and unnecessary system of insurance laws and regulations,” concluded Wren.

The Coalition Opposed to a Federal Insurance Regulator is a coalition composed of property and casualty companies, life and health insurance companies, insurance trade associations, agents and brokers which oppose federal efforts to create a dual, bifurcated system of state and federal insurance laws and regulations.