This week, the U.S. House passed U.S. Rep. Bill Posey’s, R-Fla., bill to ensure insurance policies won’t be used to bail out financial institutions.
Posey’s "Policyholder Protection Act" would make state insurance regulators part of the process when the Federal Deposit Insurance Corp. (FDIC) is part of the process when banks are liquidated. The bill would ensure that all the tools are available to state insurance regulators to protect policyholders from undue harm and continue to pay claims regardless of the financial condition of an affiliated institution when banks go under.
Sitting on the House Financial Services Committee, Posey brought out the bill earlier this year with a Democrat who also serves on it -- U.S. Rep. Brad Sherman of California. The bill was passed by voice vote on Monday.
“It’s wrong to force middle-class families to put their homeowners’ or life insurance policies at risk because some Wall Street firm made a bad bet,” Posey insisted on Tuesday after the House backed his bill on Monday night. “I want to thank Rep. Brad Sherman for his work on this bipartisan legislation that will safeguard important policies designed to protect insurance consumers and ensure that insurance claims will continue to be paid.”
“The bipartisan support for this bill proves that there is still room for common sense legislation that protects consumers,” said Sherman. “The assets of an insurance company should be walled off from the risky practices of their affiliated financial institutions. The assets of an insurance company are needed to pay claims of their policyholders, and those dollars should not be jeopardized by complex bets, risk taking, or poor management elsewhere within a large financial firm. I want to thank Congressman Posey for his great work and leadership on this bill.”
Posey and Sherman rounded up more than 30 co-sponsors of the bill including Florida Republican U.S. Reps. Dennis Ross and Dan Webster. The bill has the support of some of the leading conservatives in the House including Republican U.S. Reps. John Duncan of Tennessee, Walter Jones of North Carolina and Joe Wilson of South Carolina but there are also Democrats on board including U.S. Reps. John Delaney of Maryland and Denny Heck of Washington.
The Senate version is being backed by two senators who sit on the U.S. Senate Banking, Housing and Urban Affairs Committee: U.S. Sen. David Vitter, R-La., and U.S. Sen. Jon Tester, D-Mont. That committee received the House bill on Tuesday.
Reach Kevin Derby at kderby@sunshinestatenews.com or follow him on Twitter: @KevinDerbySSN
