[Congressional Record Volume 142, Number 143 (Monday, October 21, 1996)]
[Extensions of Remarks]
[Page E1944]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             THE INTERSTATE INSURANCE RECEIVERSHIP COMPACT

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                        HON. CARLOS J. MOORHEAD

                             of california

                    in the house of representatives

                        Monday, October 21, 1996

  Mr. MOORHEAD. Mr. Speaker, the Interstate Insurance Receivership 
Compact is the product of the efforts of a group of state insurance 
regulators and legislators that were concerned about the problems that 
have been presented by the administration of multistate insurance 
receiverships. After examining the compact and its plan of operation, I 
became convinced that the compact would make an important contribution 
to the regulation of insurance by the States. As a result, I introduced 
House Joint Resolution 189 for the purpose of granting the explicit 
consent of Congress to the compact. I have come to believe, however, 
that the Interstate Insurance Receivership Compact does not actually 
require congressional consent to be valid.
  The compact has now been adopted by four States, in addition to my 
home State of California, Illinois, Michigan, Nebraska, and New 
Hampshire. The compact is in the process of organizing its commission 
and establishing its rules so that it can fulfill its intended purpose 
of facilitating the open, fair, and efficient administration of 
insurance receiverships that have a multistate impact.
  A hearing on House Joint Resolution 189 took place before the 
Commercial and Administrative Law Subcommittee of the Judiciary 
Committee of the House of Representatives on September 18, 1996. The 
testimony presented at the hearing, and the written submissions 
received both before and after the hearing, were, without exception, 
supportive of the compact and in some cases, enthusiastic. Testimony 
was personally presented by Senator Leo Fraser, of New Hampshire, a 
legislator who was instrumental in advocating the compact concept, and 
Robert Lange, director of insurance of the State of Nebraska and the 
first chairman of the compact commission.
  Written testimony was submitted by Peter Gallanis, special deputy 
receiver for the State of Illinois. In addition, Gov. Jim Edgar, of 
Illinois, and Gov. Ben Nelson, of Nebraska, wrote to Judiciary Chairman 
Henry Hyde and expressed their active support for the agreement. 
Significantly, no opinions to the contrary were expressed at the 
hearing.
  A number of important points were made in support of the compact. 
First, the purpose of the compact and its operation are fully 
consistent with the State regulation of insurance as set forth in the 
McCarran-Ferguson Act of 1945. The compact facilitates and enhances 
what the States are already doing. It merely allows them to do so more 
efficiently.
  Second, the terms of the compact clearly establish that there is no 
usurpation of any Federal prerogative by the compact and there is no 
unlawful delegation of State authority to the compact or its 
commission. The drafter of the compact carefully provided that each 
State would have the opportunity and ability to withdraw from the 
compact if it should decide to do so. In addition, each State has the 
ability to opt out of a rule promulgated by the compact commission if 
that State finds the rule to be undesirable.
  Interstate compacts have made an important contribution to the 
ability of the States to govern and to regulate, and, therefore, to the 
constitutional system of federalism. Many compacts have received 
explicit congressional consent. Many others have not received consent 
because the law, as interpreted by the U.S. Supreme Court, does not 
require it. The testimony, letters of support, and the language of the 
compact itself have now convinced me that the Interstate Insurance 
Receivership Compact is one of those compacts that does not require the 
explicit consent of Congress.

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