The Minnesota House and Senate have a message for Congress: leave the business of regulating insurance to the states.
On May 15, the House and Senate passed a resolution memorializing Congress to oppose legislation that would create a national insurance charter. The resolution, passed 94-0 in the House and 65-0 in the Senate, argues that states are better regulators than the federal government.
As an example, it cites the failure of federal regulators to prevent the collapse of American International Group. While the part of AIG regulated by the federal government eventually had to be bailed out, the resolution notes, none of AIG’s 170 state-regulated insurance subsidiaries failed.
The text of the resolution further argues that setting up a national insurance regulating entity could lead to weaker regulations and could compromise consumer protections.
Rep. Joe Atkins (DFL-Inver Grove Heights), who sponsors the resolution with Sen. Linda Scheid (DFL-Brooklyn Park), said many industry groups have “expressed disinterest” in having the federal government regulate insurance.
“What is going on right now in Washington, D.C. is they want to take over regulation of the insurance law,” Atkins said, adding that the resolution has broad support from state legislatures and insurance regulators.
Some House members chose not to vote on the resolution. In general, some members view resolutions as being pointless or ineffective.
Among those not voting was Rep. Mark Buesgens (R-Jordan), who said he agreed with the underlying message of the resolution, but he doubted whether it would have an impact.