ONI Debate Heats up...in Bermuda

Yesterday, eight insurance lobbying groups released a letter opposing Senator Merkley’s amendment to the financial re-regulation bill that we discussed last week.   Merkley’s amendment would strip out a provision in the bill that allows a newly-established Office on National Insurance (ONI) to unilaterally negotiate and approve international insurance agreements that give foreign insurers broad new privileges.  The ONI could then preempt state laws that conflict with the agreements.

It’s not surprising that big insurers would launch an attack on the right of states to regulate their insurance markets. What is surprising is that one of the lobbying groups signing onto the letter is the Association of Bermuda Insurers and Reinsurers.  Yes, that’s right, insurance corporations that have benefited from the lax tax laws in Bermuda for years are now looking to tear down regulations through the ONI.

As small as Bermuda may be (only 68,000 people live on the island), Bermuda is second only to the U.K. as a home to foreign insurers in the United States. About 17 percent of foreign insurers in the U.S. are incorporated in Bermuda, compared to 18 percent that are incorporated in the U.K.

So, we must ask Senators who have not yet committed to supporting the Merkley amendment: Will you fight to preserve the right of states to regulate their insurance markets, or will you let tax-skirting insurance corporations in Bermuda erode crucial consumer protections?

(Thanks to Flikr user p_snelling for the photo)