PCI Hears Rep. Baker Describe SOX Regulatory Reform

Rep. Richard Baker (R-La.), chair of the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises told members of the Property Casualty Insurers Association of America that the so-called Oxley-Baker “roadmap” will result in a “real legislative package with all parties at the table.”

The PCI noted that over 70 CEOs and senior executives from PCI member companies were gathered at the association’s annual Legislative Action Day in Washington, DC last week. In addition to thier meeting with Rep. Baker, they were briefed on key political and economic issues by the White House staff and a Treasury Department official. They also brought the “industry’s message to dozens of key legislators on Capitol Hill.”

Baker told the PCI representatives: “When you limit availability because of regulatory interference, you limit consumer choice. Rate regulatory relief is the most critical part of the Oxley-Baker package. The bill will not move without it.” He indicated that he expects a formal legislative proposal to be heard by the House Financial Services Committee later this year, and noted that he is working closely with both Republican and Democratic members of the committee to agree on language that closely resembles the Illinois system of rate regulation.

Baker urged insurance company executives to be actively engaged in the effort to push the legislation through Congress. He observed that “most members of Congress are not experts in insurance and financial services. They need your help to understand the importance and complexity of your business and the need for meaningful regulatory reform.”

The meeting with Rep. Baker also addressed the reauthorization of the Terrorism Risk Insurance Act (TRIA) scheduled to expire in 2005. He observed that, following the introduction on June 18 of the bill to extend TRIA for two years, “Congress cannot wait until after the Treasury Department study on TRIA is completed next June to determine whether or not to extend this important law. We are only going to get one shot at an extension, so we better make it a good one.”

Following Baker’s remarks, PCI executives took to the Hill for meetings with their Representatives and Senators. Member company executives provided legislators information on the importance of TRIA extension, the need for comprehensive class action and asbestos litigation reform, and expressed their views on the need to modernize the insurance regulatory system.

“It is so important for insurers to be involved in the political process through events like Legislative Action Day and other grassroots activities in their home states,” stressed Carl Parks, senior VP – federal government relations. “There is no substitute for personal contact between legislators and informed, concerned constituents from their districts. PCI members’ participation in these activities personalizes the industry and reminds legislators that folks back home have a direct stake in the outcome of these political debates.”