They are wary of absolute power, because it corrupts absolutely - and they want Congressman Jeb Hensarling to know it.
The National Association of Professional Insurance Agents (PIA) has sent correspondence to Hensarling, who is Chairman of the House Financial Services Committee, to express its concerns about the creation of a new federal insurance oversight office that has the potential to centralize regulatory power in the hands of one individual.
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PR Newswire report said that lawmakers are currently considering the establishment of the Office of the Independent Insurance Advocate within the Treasury Department.
According to the report, the proposal to create the new office is contained in the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs (CHOICE) Act, which is intended to limit federal encroachment on the business community which resulted from the Dodd-Frank Act.
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“The language in question merges the Federal Insurance Office (FIO) with the independent member with insurance expertise on the Financial Stability Oversight Council to create the Office of Independent Insurance Advocate,” the wire report said.
What set off PIA’s alarm bells is the way the proviso is worded, in such a manner that it prohibits the Secretary of Treasury from taking action to “delay or prevent the issuance of any rule or the promulgation of any regulation by the Independent Insurance Advocate.” The language of the proposed law also gives the person who occupies the appointive position carte blanche “in any matter” as it bars the Treasury Secretary from undertaking any interventions over the individual’s actions, despite the office being housed under the Treasury Department.
Furthermore, the provision states that the director of the new office would be a Senate-confirmed presidential appointee serving a six year term. The said office will also have its own budget and would have the capacity to hire its own staff, including lawyers, analysts and economists, the report said.
“We are struck by how powerful this position would be,” PIA national vice president of government relations Jon Gentile said in the report. “This office could potentially grow in a manner that would lead to a federal regulatory bureaucracy.”
“This provision of the Financial Choice Act runs completely counter to the intent of Dodd-Frank reform by creating a new, expansive and unnecessary federal insurance bureaucracy with the potential to grow,” PIA national executive vice president & chief executive Mike Becker added.
Moreover, he explained: “The Independent Insurance Advocate could lead to a federal insurance czar with no supervision, who would be positioned to usurp our strong and effective system of state insurance regulation.”
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