Pomeroy Says Insurance Pre-Emption Bill Is Not Likely To Pass.

Rep. Earl Pomeroy, D-N.D., told a group of insurance professionals today that he did not think that a draft measure that would create uniformity in insurance rules and pre-empt state price controls would pass the House this year. Pomeroy, a former state insurance commissioner, told a meeting of the Council of Insurance Agents & Brokers that he believed that there is a "tremendous reluctance" in Congress to move on the draft bill by Financial Services Capital Markets Subcommittee Chairman Richard Baker, R-La. Pomeroy cited provisions in the draft that he contended would take away too much power from local regulators overseeing property and casualty rates. "I predict to you with total certainty this bill will not reach the House floor this year," Pomeroy said. He also said lawmakers were skeptical of providing a federal bailout to insurance companies to pay out claims when major natural disasters strike. Congress will have to act soon to increase the borrowing limit for the federal flood insurance program to pay out claims from Hurricane Katrina. Sen. Ben Nelson, D-Neb., told the council that Congress should examine tax provisions to allow insurance companies to build up enough reserves so they can pay claims when a major natural disaster strikes, instead of looking for a federal bailout. "Take a look at New Orleans. Not everything can come back to the federal government," said Nelson, a former director of the Nebraska Department of Insurance.