"This bill is about putting the referee back on the field and saying, 'Obey the rules; do not trample on the little people; don't take risks that
you will expect them to pay for,'" said House Majority Leader Steny Hoyer, D-Md.

Senate action was delayed because of procedural reasons exacerbated by the unexpected death of Sen. Robert Byrd, D-W.Va., and the fact that Republicans balked at a last minute decision to add a tax on financial institutions to raise $19 billion estimated to pay for implementation of the bill over 5 years. That forced Democrats to reopen the conference and drop the tax in favor of other means of raising the money.

Ironically, the delay benefited the insurance industry. Blain Reithmeier, a spokesman for the American Insurance Association, explained that, "This is a major development because in removing the proposed tax, insurers will no longer face the potential front-end assessments as was originally proposed in that title of the bill."

The insurance industry escaped most provisions of a bill that was mostly "bank-centric."

The National Association of Insurance Commissioners thanked negotiators crafting a final bill saying that it "largely preserves the critical role of state insurance regulators in protecting consumers and ensuring the viability of the insurance industry."

Specifically, NAIC officials said they supported the final language in the bill creating the so-called Federal Insurance Office.

The final bill allows the FIO to provide Congress and the administration with information and expertise on insurance matters in the course of setting government policy and conducting trade negotiations.

Jane Cline, NAIC president and West Virginia insurance commissioner, said, "We were pleased to see that the Federal Insurance Office (FIO) set up under the bill is narrowly designed to carry out its mission while not unnecessarily undermining strong state regulation."

"In similar fashion, the addition of a state insurance regulator to the Financial Stability Oversight Council created by this legislation will add an important safeguard for consumers and provide an early warning system for other financial regulators if an insurance company were to become subject to systemic risk," she added.

Under the bill, federal regulators would have the authority to wind down troubled large institutions. But, as the NAIC noted, the measure also makes clear that state insurance regulators will continue to have the ability to "wall off" insurance companies from troubled holding companies, protecting insurance policyholders from other risks in the financial system. State regulators will also retain their role to monitor consumer protections in the insurance sector.

The bill would also impact industry investment and hedging activities.

In the FIO, the Treasury Department will share the ability to conclude bilateral trade agreements on insurance with foreign countries that preempt inconsistent state laws with the U.S. Trade Representative's Office.

The office will have no regulatory authority, but it will have the power to monitor all activities related to the business of insurance except for health insurance and long term care insurance.

The final language also mandates that the new FIO conduct a study of insurance regulation and make recommendations to Congress within 18 months. The House added a provision to the study requiring that the study include recommendations on the U.S. and global reinsurance markets.

The surplus lines provisions in the bill dictate that in any multi-state placement of surplus lines, the only state whose rules govern access to the products is the state in which the insurance is placed–the "principle place of business" for the insured.

Under the provision, those rules include diligent search requirements (declinations), premium tax allocations, and eligibility standards. The new rules will go into effect one year after the measure is signed into law.