81R8198 BPG-D
By: Taylor H.R. No. 798
R E S O L U T I O N
WHEREAS, For more than 150 years, state insurance regulators
have provided effective consumer protection and industry
oversight; some members of the United States Congress, however,
have proposed to undermine this time-tested regulatory system by
allowing insurance companies to opt out of state oversight and into
a new federal system of chartering, licensing, regulation, and
supervision; and
WHEREAS, State lawmakers have a unique understanding of the
needs of their constituents and of the specific conditions and
characteristics that apply in their insurance marketplace; they are
able to assess and respond to changing circumstances specific to
their states with appropriate modifications to regulations; and
WHEREAS, A federal charter system would permit companies to
circumvent carefully crafted consumer protection laws and strong
solvency requirements that have been put in place by individual
states; proponents of such a federal system have cited the recent
collapse of the American International Group as justification for a
federal charter, but in fact, the insurance subsidiaries of AIG
that are regulated at the state level have generally retained their
value while federal oversight failed to prevent the meltdown of the
parent company; and
WHEREAS, Given the faltering economy, it is more important
than ever for state officials to exercise strong oversight of the
insurance industry for the benefit of consumers and to maintain the
stability of insurance companies; moreover, premium taxes on
insurance are a significant source of revenue for the general funds
of all states, providing more than two percent of state tax revenues
according to the United States Census; experts estimate that an
optional federal charter could eventually draw away from the states
more than $14 billion in premium taxes and fees; and
WHEREAS, The bifurcation of the insurance regulation system
is unnecessary and likely to promote confusion, ambiguity, and
fragmentation; it would create an expensive new federal bureaucracy
that would inevitably be less nimble and responsive than state
regulatory systems, while weakening the ability of the states to
protect the interests of their residents; the McCarran-Ferguson Act
of 1945 affirmed the role of states as principal regulators of
insurance, and there is no compelling reason to make a change in the
regulatory rights and responsibilities of the states; now,
therefore, be it
RESOLVED, That the House of Representatives of the 81st Texas
Legislature hereby express its opposition to any federal
legislation that would create an optional federal charter for
insurers; and, be it further
RESOLVED, That the chief clerk of the Texas House of
Representatives forward official copies of this resolution to the
president of the United States, to the speaker of the house of
representatives and the president of the senate of the United
States Congress, to the members of the U.S. House Financial
Services Committee, to the members of the U.S. House Banking
Committee, to the U.S. secretary of the treasury, and to all members
of the Texas delegation to Congress with the request that this
resolution be officially entered in the Congressional Record as a
memorial to the Congress of the United States of America.