ANDREA NUCIFORO
Will chair new committee
In an effort to streamline legislative committees on Beacon Hill, the Joint Committee on Banks and Banking and the Joint Committee on Insurance have merged into one. The restructuring was announced in January and one familiar face will chair the newly named Financial Services Committee.
Sen. Andrea Nuciforo Jr., D-Pittsfield, was appointed as the Senate chairman of the Legislature’s Joint Committee on Financial Services late last month. The appointment came from Senate President Robert E. Travaglini.
“Sen. Nuciforo brings the expertise and work ethic necessary for the job,” Travaglini said in a statement. “Under Andrea’s leadership, I look forward to a very productive session for the Financial Services Committee.”
Nuciforo formerly served as the Senate chairman of the Joint Committee on Banks and Banking. During that time, he co-authored legislation protecting consumers from predatory lenders and authored legislation modernizing Massachusetts banking laws that had not been updated in decades.
“I am looking forward to these increased responsibilities,” Nuciforo said in a statement. “Over the last several years, the public has witnessed an integration of the banking, insurance and securities industries in Massachusetts and across the country. Given these changes in the marketplace, the Senate president and I believe the Legislature should have a single committee to consider current laws, and legislative proposals, affecting the industries and consumers.”
In a later interview, Nuciforo said the change is “substantial” because of the integration of financial services over the years. He said the committee will create one place where issues with banks, credit unions, mortgage companies, insurance and securities can be considered. Mutual funds, which were part of Banks and Banking in the past, are also expected to be dealt with in the new committee.
“I’ve been chairing Banks and Banking for five years,” Nuciforo said. “I found that industries testifying at Banks and Banking were also testifying at the insurance committee.”
‘Coming Fresh’
According to Nuciforo, two significant developments – the U.S. Supreme Court’s ruling in Barnett Bank of Marion County v. Nelson in 1996, and the passage of the federal Gramm-Leach-Bliley Act of 1999 – have reshaped the financial services marketplace in Massachusetts and throughout the United States. In Barnett, the Supreme Court allowed banks to compete directly with insurance companies and agents, subject to a few minor limitations under state law and regulation. GLB repealed the Glass-Steagell Act and allowed banks, insurers and securities firms to compete within the same markets. The U.S. House of Representatives, 40 states and Washington, D.C., also have committees that consider legislative proposals relating to both banks and insurers.
Building one committee made sense, Nuciforo said, because many banks now sell insurance and there are also a number of Bay State businesses in the fields of banking, insurance and securities that interact with multiple regulators.
The committee is modeled on the House Committee on Financial Services in Washington, D.C. Rep. Barney Frank, D-Massachusetts, is a member of that committee.
“We chose to build this committee on the federal model, but excluding some matters,” Nuciforo said.
For instance, while the federal committee deals with housing matters, Nuciforo said the Massachusetts committee will leave that to a separate committee.
Nuciforo said there are substantial matters that will be addressed by the Financial Services Committee. According to Nuciforo, Massachusetts is the only state in the country where the insurance commissioner sets the auto insurance rate. He said there has been an effort in the auto insurance industry to go to a competitive rating structure.
“The issue of auto [insurance] rates will be front and center,” Nuciforo said.
Homeowners’ insurance will be another matter on the table for the Financial Services Committee, as well as the approval process for bank mergers and the strengthening of state securities laws. Creating community reinvestment requirements for mortgage companies is also expected to come before the committee. It has stalled in the House of Representatives and in committee in recent years.
“This might be the year [it passes],” Nuciforo said.
Nuciforo, who has focused on banking matters for a number of years, said he intends to spend a lot of time learning about insurance laws.
“I am coming fresh to auto insurance, homeowners’ insurance and other insurance issues,” Nuciforo said.
The Massachusetts Bankers Association, which worked closely with Banks and Banking, is supportive of the committees merging.
Daniel J. Forte, president of the MBA, said combining the two committees reflects the existing nature of business as it stands today.
Insurance and banking have evolved over the years into a financial services industry and Forte said the changes on Beacon Hill are recognizing that evolution.
The banking industry is now part of one of the “super-committees,” Forte said. That is a positive change because issues tend to move to the floor quickly, he said.
Boston bank attorney Stanley Ragalevsky, a partner at Kirkpatrick & Lockhart, Nicholson Graham, said the two former committees were important for consumers.
“Banking and insurance are two of the most important committees up there from the point of view of the consumer,” Ragalevsky said.
However, there are some drawbacks to combining the two committees. Forte noted that the evolution of financial services is not complete and legislators still need to recognize the uniqueness of the banking industry and the insurance industry.
“You can’t look at both industries on all issues as one,” Forte said, adding there are unique needs and regulatory issues for each industry. He also pointed out that there could always be certain issues that will never cross over in both industries.
In addition to Banks and Banking, Nuciforo has been a longstanding member of the Senate Committee on Ways and Means and has served on the Joint Committee on Local Affairs, the Senate Committee on Steering and Policy and the Joint Committee on Election Laws. He has supported legislation that enhances elder services, promotes economic development, strengthens public education and protects the environment.
A House chairman and members of the Financial Services Committee have yet to be assigned. Nuciforo said he expects bills to be referred to the committee soon.
