Insurance Coalition Urges Congress to Take Up Optional Federal Charter

In a letter to leaders of the Senate Banking Committee and the House Financial Services Committee, insurance companies joined with agents groups and other members of the business community to urge Congress to adopt an optional federal system of insurance regulation as an alternative to the current multistate system.

On February 7, members of a group known as the Optional Federal Charter Coalition (OFCC) sent letters to Senate Banking Committee Chairman Chris Dodd (D-CT) and Ranking Member Richard Shelby (R-AL) in addition to House Financial Services Committee Chairman Barney Frank (D-MA) and Ranking Member Spencer Bachus (R-AL). The letters urge the committee leadership to take up legislation known as the National Insurance Act of 2007, which would create an optional federal charter for life and property/casualty insurance agents and companies.

According to the letter, “An optional federal charter proposal would embrace the best of state insurance regulation and allow insurers, reinsurers, insurance agencies and insurance producers to take advantage of the regulatory flexibility banks have long enjoyed – the option of doing business under one set of national rules.”

The letters were signed by Agents for Change, American Bankers Association, American Bankers Insurance Association, American Council of Life Insurers, American Insurance Association, Business Roundtable, Life Insurers Council (A Council of LOMA), The Council of Insurance Agents and Brokers, The Financial Services Forum, The Financial Services Roundtable, The National Association of Independent Life Brokerage Agencies and the Reinsurance Association of America.

Earlier this year, both Chairman Dodd and Chairman Frank indicated that their respective committees would hold hearings in 2008 on the optional federal charter proposal. Last year, the House Financial Services Committee held two hearings on the problems with the current state-based insurance regulatory system. This year’s hearings will focus on possible solutions to those problems, including the creation of an optional federal charter. NAIFA is currently neutral on the creation of an OFC.

• Read the complete letters at www.naifa.org/advocacy/documents/ofcc022008.pdf.

The OFC and Agents
To learn more about NAIFA’s position as well as how the OFC would affect agents, visit the insurance regulatory reform section of NAIFA’s website at www.naifa.org/advocacy/irr/ofc.cfm

To hear experts discuss insurance regulatory reform, listen to NAIFA GovPod on the issue at www.naifa.org/advocacy/podcasts.cfm

• February GovPod – The State of State Insurance Regulation
• January GovPod – Optional Federal Charter

NAIFA Staff Contact: Jill Edwards, Director, Federal Relations, 703-770-8158.