On Wednesday, the U.S. House Financial Services Committee 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.
“I strongly support this bipartisan, common-sense fix that needs to be made,” Sherman said when the bill was unveiled in March. “It will ensure that those with insurance policies will not have the security of those policies undermined by a contingency they could not foresee.”
After the committee passed the bill without opposition, Posey made the case for his legislation.
“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 said on Wednesday. “This bipartisan legislation safeguards important policies designed to protect insurance consumers and ensures that insurance claims would continue to be paid.”
Posey and Sherman have rounded up more than 30 co-sponsors of the bills 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.
Reach Kevin Derby at kderby@sunshinestatenews.com or follow him on Twitter: @KevinDerbySSN
