U.S. PIRG Consumer Blog: Insurance bill on House floor is ill-advised

We've joined Public Citizen, the Center for Economic Justice and other groups (our letter) in opposing HR 5840 (Kanjorski-D-PA) to establish a federal Office of Insurance Information. That's a laudable goal, but despite Mr. Kanjorski's well-intentioned efforts to improve the bill, it still includes dangerous state preemption language that even goes so far as to give the U.S. Treasury Department unprecedented authority to preempt state laws on the basis of its interpretation of the intent of international treaties and trade agreements, or even to make such agreements and thus preempt state law. The bill may be voted on as early tonight and is being considered on the suspension calendar, usually reserved for non-controversial bills (does require 2/3rds vote in approval, no amendments are in order). Reps. Jackie Speier (her release) (D-CA) (former chair of the California Senate Insurance Committee) and Dennis Kucinich (D-OH) are leading the effort against the bill. From our letter:

Never before has the U.S. government allowed a federal agency to interpret or enter into international agreements on subject matter under the authority of the legislative branch, and then preempt states through rule-making on the basis that state policies are in contradiction to those agreements. HR 5840 would allow the Treasury to “coordinate federal efforts and establish federal policy on international insurance matters” (emphasis added) and then preempt state law via administrative action upon its own determination that the state law is “inconsistent with such policy.”

While the National Association of Insurance Commissioners supports the proposal, a number of commissioners do not. Opposition from California insurance experts at consumerwatchdog.org: Consumer Watchdog Says $85 Billion AIG Bailout Should Stop Today's Vote on Congressional Proposal to Override State Insurance Regulations.