Consumer Groups Warn Against Congress' Insurance SchemeSeptember 18, 2008 - by Donny Shaw
In a week when it’s become painfully obvious that the federal government did not do a good job regulating the financial and insurance markets, a bill is scheduled to pass Congress that would allow the federal government to override state’s consumer protections and give them new power to enforce international agreements regarding insurance policies.
>We are writing to you today to ask you to oppose a financial services bill, HR 5840 that would allow the Department of the Treasury to interpret or enter into international agreements regarding insurance policy and regulation, and then preempt state insurance laws and regulations that Treasury believes to be in contradiction of such international agreements….
>This bill should not have been placed on the suspension calendar. Many members of Congress remain unaware of the bill’s negative implications for state consumer protections – much less that the bill would set a bad precedent by delegating new authority to an executive agency to become international trade and commercial agreement “enforcer” against U.S. state consumer regulatory policy.
At a time when the U.S. and global economies are suffering major downturns – caused in large part by the deregulation of financial services promoted by multinational banking, investment and insurance firms – it is critical that Congress use this opportunity to reverse course on bills like HR 5840 and prevent foreign multinational firms and trade rules from undermining important consumer protections. We strongly urge that HR 5840 be removed from the suspension calendar and given a more thorough review.