June 24, 2010 -- The Self-Insurance Institute of America, Inc. (SIIA) today reported that its lobbying team has intensified efforts to bring modernization of the Liability Risk Retention Act (LRRA) back to the attention of Congress as the House Financial Services Committee and the Senate Banking Committee wrap up their conference finalizing a bill to revamp the nation's financial regulatory system.
Due to the pressing concern by Congress to shore up the nation's financial markets, action on the SIIA-backed bill to modernize the LRRA (H.R. 4802) has been stalled. But as the regulatory reform bill nears its completion, SIIA lobbyists are working with Capitol Hill staff to make sure that issues related to ART market expansion are addressed in the coming months.
In March of this year SIIA worked with Rep. Dennis Moore (D-KS) and Rep. John Campbell (R-CA) to introduce H.R. 4802, The Risk Retention Modernization Act. The bill would expand the allowable coverage for risk retention groups (RRGs) to include commercial property insurance, as well as establish uniform and baseline corporate governance standards for RRGs.
The bill would also give the Treasury Department broad new powers to oversee the risk retention industry, including the authority to mediate interstate disputes regarding RRG authority. Under the legislation, the Department of Treasury would have the authority to review disputes between risk retention groups and non-domiciliary state regulators and offer interpretations regarding the Risk Retention Act.
SIIA expects to work with Senator Jon Tester (D-MT) to introduce a Senate version of H.R. 4802. Although passage of the Senate bill is doubtful this year, it will set the stage for passage in the 112th Congress, which begins in January of 2011. Senator Tester agreed to introduce the modernization bill in a meeting with SIIA representatives during the association's 24th Annual Legislative Conference in March. The senator has been waiting for the passage of the Wall Street Reform Act to move forward with introduction of the risk retention bill.
In addition to introduction of the Senate bill, SIIA has been working with the staffs of Reps. Moore, Campbell and Chairman Frank, to draft a letter to the Government Accountability Office (GAO) requesting a study on regulatory interference related to RRGs by non-domiciliary State regulators.
The formal request, which will be made in the next few weeks, will ask the GAO to conduct a study examining instances when non-domiciliary states violate the Risk Retention Act by attempting to regulate risk retention groups not under their authority; the costs to RRGs associated with these state actions; and possible legislative solutions that would reinforce the foundation of the LRRA of 1986. SIIA believes the findings of the study will demonstrate significant and unlawful interference by non-domiciliary States.
Watch for additional updates from SIIA in the coming weeks and months. A more detailed briefing on this subject will be provided at the association's National Conference & Expo, scheduled for October 12-14, 2010 in Chicago.