Rep. John D. Dingell., D-Mich., made a lot of people in the insurance industry angry Nov. 2 with his calls for federal regulation, but he made some friends the next day when he warned the Department of Housing and Urban Development that it is exceeding its authority in its proposed rulemaking on redlining. In a letter to Alice M. Rivlin, director of the Office of Management and Budget, and HUD secretary Henry G. Cisneros, Dingell offered an argument that the Fair Housing Act, which has broad application, does not deal with property insurance.
The letter may have meant more when Dingell wrote it, days before the Nov. 8. election, as the influential chairman of the Energy and Commerce Committee. Fortunately for P&C insurers, his letter echoed an earlier one from Rep. Carlos Moorhead, R-Calif., who is now in line take over as head of that panel.
The language of the law does not explicitly address the matter and legislative history does not indicate any intention to apply its provision to the business of insurance, Dingell said.
This is particularly significant because there are other provisions of the act that apply its requirements to mortgage lending and real estate brokerage services, the congressman said. He also noted that Congress specifically rejected efforts to amend the law to cover property insurance in 1980, 1983, 1986 and 1988.
In view of this history, and in light of the fact that there is a dispute among the circuits as to whether HUD has any authority to regulate insurance, it seems unwise for HUD to proceed with a rulemaking on property insurance.
I strongly urge you, in view of the confusion as to HUDs intentions on the [rulemaking proposal], to make it clear that any HUD rulemaking on discrimination in property insurance will not provide for insurance data collection or for the regulation of the business of insurance, he said
Dingell reminded Rivlin and Cisneros that the House passed H.R. 1188 earlier this year, a bill that assigns the responsibility for insurance data collection to the Department of Commerce rather than to HUD. He also accused them of allowing their underlings play a disruptive role in lobbying.
I am well aware of their efforts during the 103rd Congress to stake out for HUD a vast and expansive array of authorities in this area, which, as the House votes on H.R. 1188 indicate, had absolutely no chance of being enacted into law, Dingell said.
Dingell pointed out that the House voted for a narrow approach to data collection. I believe it is highly inappropriate for HUD to proceed with a rulemaking that would authorize HUD to require disclosure from insurance companies or to otherwise regulate the business of insurance, the congressman said.
