The National Association of Professional Insurance Agents (PIA) has hailed passage of the Policyholder Protection Act. The measure was included in the omnibus appropriations agreement that was passed 316-113 in the House and 65-33 in the Senate on December 18.
The Policyholder Protection Act prohibits federal regulators from using assets designated to pay out insurance claims to “prop up” an affiliated bank.
“This legislation greatly improves the ability of state insurance regulators to protect policyholders by ensuring that insurance companies structured under larger financial firms are not held financially responsible for an affiliated bank’s failure or financial crisis,” said PIA National Vice President of Government Relations Jon Gentile. “This common-sense consumer protection legislation is designed to ensure that the money set aside to pay insurance claims is not appropriated by the federal government to bail out ‘too big to fail’ financial institutions.”
The legislation also protects policyholders from actions taken by the Federal Deposit Insurance Corporation (FDIC) that would liquidate insurers, another function of state insurance regulators. It limits the ability of the FDIC to seize insurance company assets intended for policyholder payments when an affiliated financial entity is subject to liquidation.
“Despite the fact that there is still significant disagreement on many major issues, insurance appears to have broken free of Capitol Hill gridlock,” said PIA National Executive Vice President & CEO Mike Becker.
“This Congress has taken many actions to benefit insurance consumers, approving bills endorsed by PIA,” Becker said. “In addition to the Policyholder Protection Act, lawmakers included a two-year delay in the onerous 40% excise tax on so-called ‘overly generous’ health plans [the “Cadillac Tax”] in the omnibus; previously passed into law the Protecting Affordable Coverage for Employees (PACE) Act to allow small and mid-sized businesses to continue to provide affordable healthcare coverage to their employees; and voted overwhelmingly to reverse a planned $3 billion cut to crop insurance. We appreciate the responsiveness demonstrated by members of Congress for the insurance concerns of their constituents.”
Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street AmericaSM. PIA’s web address is www.pianet.com.
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