“This bill is bad for consumers, bad for the insurance business and bad for American taxpayers,” said PIA Executive Vice President & CEO Len Brevik. “It is being pushed by special interests that want to establish a duplicative federal insurance regulatory regime for their own benefit and weaken consumer protections in the process.”
The bill introduced on Wednesday July 25 by Rep. Ed Royce (R-Calif.) and Rep. Melissa Bean (D-Calif.) is companion legislation to S. 40, introduced by Senators Tim Johnson (D-S.D.) and John Sununu (R-N.H.) on May 24.
Last time anything like this was approved was in the mid 80s. It gave banks the option of choosing between both state or national chapter. When an option like this is open, it is impossible to try and predict what the market will go for, and because of this there can be negative reproductions. In the 80s, this is exactly what happened and Americans were left with a $150 billion bill.
State charters did not want to lose state money to the federal government, and they began to try and match what the federal charters were. This lead to a capitalistic mindset between state and federal governments over investment and banking. Standards were changed and the race to give the best price left banks with less coverage than they needed.
This is the same thing that would happen if the National Insurance Act passed. In business, whether it is on Wall Street or in Washington, no one wants to loose money or the chance to make money. State Insurance Companies and National Insurance companies would undercut each other until people were not fully covered.
This is a touchy subject, health insurance is one of those things that no one can quite put a finger on. Private companies have taken over something that should be available to all citizens and it is going to be a long road if government is going to try and regulate.
