Look at this nasty crap snuck into the financial reform bill. Who is responsible for this insanity?

[Elwood P Dowd]

Email I received from Public Citizen.....

Action Alert - April 29, 2010
Get Free Trade Sneak Attack Out of Financial Reregulation Bill!

Make sure both of your senators join the effort to root out the sneaky trade agreement attack on financial reregulation!

Dear Supporter,

Buried in the 1200-page Senate financial reregulation bill we found a sneaky provision that would undermine state-level insurance consumer protections if they conflict with trade agreements! Yup, the "Office of National Insurance" (ONI) proposal would empower the Treasury Department to unilaterally override existing state insurance regulations that it deems to be out of step with international agreements.

Urge your Senators to cosponsor TODAY the "Merkley amendment" which strikes these unfair trade provisions from the bill.

It is incomprehensible that, in the context of worldwide pledges to reregulate financial services and get destructive banks and insurance firms under control, any further deregulation would be considered by Congress - much less as part of Congress' priority financial reregulation package!

Yet tucked deep in the bill designed to clean up our financial mess is this sneaky provision that establishes a new ceiling on regulation. It would undermine existing insurance consumer protections in all 50 states. How? Treasury would be newly empowered to enter into international insurance agreements without Congress voting on the pacts and without any role for the 50 state insurance commissioners now responsible for regulating these firms. And, it would then allow Treasury to overrule existing state laws that provide greater consumer protections than these undemocratic international agreements.

We don't need a race to the bottom in insurance consumer protections! Take action now.

Why would Treasury want this new power to unilaterally write insurance regulatory policy behind closed doors? Unbelievably, it is to allow foreign insurance firms to have better access to the U.S. market - by not having to follow the same rules as U.S. companies. Hundreds of banks had to be bailed out through the Troubled Assets Relief Program (TARP) -but only three insurance firms. Yet, the ONI would grant Treasury new power to weaken the state-level insurance rules that actually worked to help foreign firms who want to operate here without complying with our laws.

This crazy proposal would make Treasury an enforcer - against U.S. states - of trade agreement and other international pacts' requirements without a foreign country having to even initiate a challenge! Now that the cat is out of the bag, state officials, labor unions, consumer advocacy organizations1 and associations like the National Association of Insurance Commissioners2 (NAIC), National Conference of State Legislatures3 (NCSL), and National Conference of Insurance Legislators4 (NCOIL) have come out against this measure.

Thankfully Senator Jeff Merkley (D-Oregon) is leading the effort to defang this ONI lunacy. He has an amendment that fixes this mess. Senator Merkley deserves our thanks - and help!

Contact both of your Senators today and ask them to cosponsor the "Merkley amendment" so the financial reregulation bill doesn't include a backdoor trade pact attack on the state insurance regulations that actually worked!

Thanks for all you do,
Sarah Edelman, Public Citizen's Global Trade Watch division

[chill_wind]

1. Stealthy. Persistent. Patient. And somewhat familiar sounding..

This sound like something I filed away from Corpwatch for mental chewing on back in 2008. Does this sound like Paulson's ghost, or what?

"Why would Treasury want this new power to unilaterally write insurance regulatory policy behind closed doors?"

Yes indeed?

Paulson Blueprint Promotes Insurance Industry Shell Game

Posted by Philip Mattera on April 5th, 2008


There’s something peculiar in the report on financial market regulation issued March 31 by Treasury Secretary Henry Paulson. The plan, touted by some as a bold expansion of federal control over capital markets and dismissed by others as a mere rearranging of the deck chairs on the financial Titanic, includes an incongruous section on the insurance industry.

While insurance is a financial service, it hasn’t been at the center of the implosion of the housing market or (aside from the bond insurance crisis) linked to the instability on Wall Street. The Paulson plan, nonetheless, provides a resounding endorsement of a “reform” that key players in the insurance industry have been seeking for at least 15 years—allowing large national carriers to do an end run around the current state-based insurance regulatory system. Such carriers would be permitted to adopt an “optional federal charter” and thereby put themselves under the supervision of a federal regulatory agency that does not yet exist.

Big Insurance has not sought federal oversight because it wants more regulation. After all, this is the industry that pioneered offshoring when some carriers moved their official headquarters to tax havens such as Bermuda. While it is true that many state regulators have been toothless watchdogs, other states have been aggressive in protecting the interests of policy holders and the public.

In fact, the Paulson proposal comes just a couple of weeks after insurers were celebrating the downfall of New York Gov. Eliot Spitzer in a prostitution scandal. During his time as New York’s attorney general, Spitzer pursued major insurance companies such as Marsh & McLennan and American International Group for offenses such as bid rigging. Marsh ended up settling for $850 million in 2005, and AIG paid a whopping $1.6 billion the following year. While it is true that Spitzer went after the industry as a prosecutor rather than a regulator, he did so in the overall context of state oversight.

The insurance industry swears that it supports the optional federal charter in the name of modernization (as does the Paulson report), but it is significant that the reform has been supported by groups such as the Competitive Enterprise Institute and the American Enterprise Institute that are no friends of regulation (some Democrats in Congress are also in favor). When word of Paulson’s insurance proposal leaked out over the weekend, the American Insurance Association rushed out a press release hailing it, saying that the optional federal charter “will be more efficient, effective and rational given the ‘increasing tension’ a state-based regulatory system creates.”

Throughout its history, the insurance industry has avoided “tension” by trying to minimize government interference in its affairs. In 1945 the industry supported the McCarran-Ferguson Act, which responded to a Supreme Court ruling by affirming the regulatory role of the states. In recent times, the industry has wanted the option of federal oversight on the assumption that it would be less onerous. I’ll let the legal scholars decide whether state or federal regulation is inherently more appropriate. The issue is whether an industry not known for generous treatment of its customers (think of Katrina victims denied coverage) is going to be subjected to some strict
oversight somewhere.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4058688&mesg_id=4065550

http://www.corpwatch.org/article.php?id=15000

I've said it before, the stealthy wealthy conservatives are nothing if not incredibly calculating and patient.

[boppers]

2. Looks like a mixed bag...

For states with crappy/corrupt regulation, a good thing. For states with strong insurance regulation, a bad thing.

[chill_wind]

3. Looks like Hank Paulson's and Marc F. Racicot's collective wet dream.

March 31, 2008.




Insurance Networking News, March 31, 2008

http://www.insurancenetworking.com/news/10648-1.html

[boppers]

4. So, an additional regulatory authority, yes?

I think the rough part is "choice of regulation". That can have some issues.

[Cessna Invesco Palin]

5. Doesn't the federal government have this power already?

I don't think states can override federal trade law as things currently stand.

[Oilwellian]

8. Each state has their own health insurance laws

Why would this legislation be in the Bill if the Feds already have the power to override state laws?

[Cessna Invesco Palin]

21. Health insurance isn't the same as international trade.

The federal government pretty clearly has jurisdiction over issues related to international trade.

[depakid]

6. Merkely's a no nonsense up and coming leader

It'll be a smart move for those to get on his bandwagon early.

[Wilms]

7. k&r n/t

[lonestarnot]

9. Fucking A.

[lumberjack_jeff]

10. Google "supremacy clause" of the US constitution.

We don't have to like it.

This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.

NAFTA and WIPO are treaties.

[Elwood P Dowd]

12. I thought a treaty required a two-thirds majority???

NAFTA was nowhere near a two-thirds majority.

[lumberjack_jeff]

13. That doesn't matter

http://en.wikipedia.org/wiki/Bricker_Amendment#Twentieth_century_rulings

It's still a treaty.

[Elwood P Dowd]

14. I don't have all afternoon to read that stuff. What is the bottom line?

How did they change the Constitution without a Constitutional Amendment?

[lumberjack_jeff]

16. So long as a treaty doesn't directly infringe on the bill of rights...

... it supercedes all other state and local laws. For all practical purposes, there is no distinction between treaties and executive agreements.

[amborin]

11. the financial "reform" bill is now a gutted joke.....

[femrap]

15. k and r

There's some really nasty 'New World Order' crap in this bill.

All checking account deposits must be kept and transferred to the new Consumer 'Protection' Agency that will be inside the Federal Reserve.

Why does this proposed Agency want to know what is being deposited into everyone's checking accts???

Somewhat related:

http://www.prisonplanet.com/trichet-calls-for-corrupt-bis-to-boss-global-government-in-cfr-speech.html

[me b zola]

17. K&R

I'll call Senator Merkley to thank him and Wyden to join him.

[me b zola]

18. The staffer in Senator Merkley's office sounded surprised & pleased

that I called to thank him for the amendment. Please remember to call his office to thank him in addition to your calls to your senator's offices.

[mimitabby]

19. thanks, i wrote to my senator

[BlueIris]

20. Nice to see Merkley's name on another noble effort.

Too bad it had to show up on a wave of such bad tidings.

[eridani]

22. Merkley amendment still viable

http://www.citizen.org/Page.aspx?pid=3257&frcrld=1

Buried in the 1200-page Senate financial reregulation bill we found a sneaky provision that would undermine existing state insurance regulations – including on solvency – if they conflict with trade agreements! Yup, the “Office of National Insurance” (ONI) proposal would newly empower the Treasury Department to unilaterally determine that existing consumer protections violate international agreements and then preempt such states policies.

Thankfully Senator Jeff Merkley (D-Oregon) is leading the effort to defang this crazy proposal. The "Merkley Amendment" would fix this. Senator Merkley deserves our thanks – and help! Please take action today!

I am writing to oppose the Office of National Insurance (ONI) provisions in Title V - Office of National Insurance, of S. 3217 the Restoring American Financial Stability Act of 2010. These provisions would authorize the Treasury Department to preempt existing state insurance consumer protections, including on solvency, based on international agreements establishing insurance regulatory policy that Treasury would be authorized to enter into without congressional approval.

In sum, these provisions would newly empower Treasury to weaken existing state insurance regulation in the name of expanding access for foreign insurance firms to the U.S. market.

This certainly is not what the American public is demanding. We expect an overhaul that remedies the failed regulation of the financial services industry, and you have promised that Congress will deliver that reform.

It is incomprehensible to me that a measure which promotes further deregulation of the insurance industry and threatens existing state-level consumer protections would be included as part of the financial re-regulation package.

I urge you to cosponsor today the “Merkley amendment” that fixes the ONI mess. If you join with your Senate colleagues in demanding that the Merkley amendment become part of the Senate reregulation package, you can stop this backdoor deregulation.