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SIIA Supports ‘Insurance Options’ Bill in Congressional Hearing

Lawrence Mirel Testifies in Support of Three Major Elements of Bill on Behalf of Association

Contact: David Kirby
410/539-6888

WASHINGTON, D.C., April 17, 2008 – The Self-Insurance Institute of America, Inc. (SIIA) has called upon Congress to pass the recently introduced “Increasing Insurance Coverage Options for Consumers Act of 2008” (HR 5792) in a Congressional hearing to examine proposals to reform insurance regulation.

SIIA was represented in a hearing yesterday by special counsel Lawrence H. Mirel, former Commissioner of Insurance, Securities and Banking for the District of Columbia, an attorney in the Washington DC law firm of Wiley Rein LLP. He spoke in the hearing of the House Committee on Financial Services, Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.

Mirel expressed support for three elements of the bill that would modernize the Liability Risk Retention Act of 1986 (LRRA) with respect to the scope, governance and federal preemption of risk retention groups (RRG):

• Expand possible coverage of RRGs to include commercial property insurance by the groups comprised of members of the same industry, profession or nonprofit organization that band together to self-insure their risks. He said that currently there is an “insurance crisis” related to the devastation of hurricanes in recent years that have caused commercial insurers to reduce the availability of coverage.
  
  
• Provide national uniformity of certain corporate governance standards in line with the recommendations by the Government Accountability Office (GAO).
  
  
• Strengthen the federal preemption principle in the original LRRA that prevents nondomiciliary states from interfering with RRGs. The original law states that RRGs licensed in any state may be operated in all states without regulatory challenges.
  

Mirel summarized SIIA’s support for the bill that, he said, “Will allow property owners new options for coming together to deal collectively with their need to insure their property risk.” The original LRRA allowed RRGs to insure only against liability risks such as product failures or professional liabilities such as medical malpractice.

“This is a bipartisan bill and should not be considered controversial by anyone who understands and values the ability of people to come together to find market based solutions to common problems,” Mirel said. He also observed, “The bill under consideration does not call for a government solution to the property insurance crisis. No new responsibilities would be undertaken by any agency of the federal or state governments and no taxpayer money would be put at risk.”

SIIA is a national trade association serving companies involved in the self-insurance/alternative risk transfer industry. Additional information about the association can be accessed on-line at www.siia.org, or by calling 800/851-7789.

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