On April 11, 2008 the NAIFA Board of Trustees recommended to NAIFA’s National Council, for its consideration and approval, to conditionally support the concept of an Optional Federal Charter (OFC) for insurance while continuing to support state-based regulation of insurance. On September 10, 2008 the National Council nearly unanimously voted to support the concept of an OFC provided that it meets several conditions. The conditions include true agent choice, enhanced consumer protections, the preservation of state regulation and the establishment of a single federal entity with expertise in insurance matters. NAIFA will endorse legislation that meets those conditions of support.

Read about NAIFA's conditional support for Optional Federal Charter

Read about NAIFA’s position on all aspects of insurance regulatory reform

The National Insurance Consumer Protection Act
Legislation to create an optional federal charter, known as the National Insurance Act, was introduced in the both the House and Senate in 2006, and modified versions were introduced in both chambers in 2007. On April 2, 2009, the latest iteration of OFC legislation—the National Insurance Consumer Protection Act (NICPA)—was introduced in the House of Representatives. NICPA, H.R. 1880, by Reps. Melissa Bean (D-IL) and Ed Royce (R-CA) and is similar in most regards to the National Insurance Act, but contains enhanced consumer protection provisions, and addresses many of the issues raised as the result of the current economic crisis.  Similar legislation is expected to be introduced in the Senate by Sen. Tim Johnson (D-SD). Read more about NICPA.

NAIFA Position: NICPA goes along way to satisfy many of NAIFA’s conditions, but we have some outstanding concerns and have not endorsed the bill.

Obama Administration’s Proposal
On June 17, 2009 the Obama Administration released its highly anticipated outline for financial services regulatory reform. The plan entitled, “Financial Regulatory Reform: A New Foundation” is a sweeping proposal that touches on all aspects of financial regulation, including insurance.  The details of the plan are expected to be unveiled in draft pieces of legislation sent to Congress over the course of the summer of 2009. The first draft, released on June 30, 2009 would create a new federal Consumer Financial Protection Agency (CFPA) to oversee consumer financial products not currently regulated by the SEC, the CFTC, or state insurance departments.  The Administration is also planning to send up draft legislation to create a federal office of insurance expertise.

Read NAIFA’s analysis of the Obama plan

Read NAIFA’s analysis of the CFPA

Watch NAIFA President Cliff Wilson’s testimony before Congress regarding the CFPA proposal

Listen to the Investment Protect Act Webinar

Part One (10/23/2009)

Part Two (10/29/2009)

Insurance Information Act (Federal Insurance Office)
Building on years of Congressional hearings on insurance regulatory reform and the Bush Administration Treasury Department’s recommendation to create an Office of Insurance Oversight, on April 17, 2008 Chairman Paul Kanjorski (D-PA) of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises introduced the Insurance Information Act of 2008.  The proposal calls for the creation of an Office of Insurance Information (OII) that would be housed within the Treasury Department. The OII would collect and analyze information on the insurance industry and would advise the Secretary of the Treasury on domestic and international insurance policy issues. The bill was approved by the U.S. House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises on July 9, 2008. Due to pressing legislative priorities associated with the market crisis, the bill was not taken up.

On May 21, 2009 Chairman Kanjorski reintroduced legislation, H.R.2609, to create a federal Office of Insurance Information (OII) within the U.S. Department of Treasury. On June 17, 2009 the Obama Administration’s released its proposal for regulatory reform. For the insurance industry, the centerpiece of the proposal is a call for the creation of a federal Office of National Insurance (ONI) within the Treasury Department which would effectively create an OII. On October 1, 2009, Chairman Kanjorski circulated a draft revised OII proposal. The new proposal, called the Federal Insurance Office, is nearly identical to the original OII bill but includes an omission of explicit subpoena power for the offices data collection function. There are also provisions in brackets for the interaction of the proposed FOI with the proposed systemic risk council and the proposed CFPA. Read more about the Insurance Information Act.

NAIFA Position: NAIFA supports the creation of a federal office of insurance information. In early 2008, NAIFA leaders undertook an exhaustive study of the various proposals to reform the regulation of insurance. During that review, it became clear that there is a fundamental lack of understanding at the federal level regarding issues that impact insurance agents and financial advisors and the insurance industry on a national and international scale. Currently there are 14 federal agencies that have a role in regulating insurance, and yet there is no central body of expertise at the federal level to provide advice and council to the Administration and Congress on policy matters impacting the insurance industry. 

Read NAIFA’s April 2009 Letter to Congress in Support of the OII

Read NAIFA's October 2009 House Financial Services Committee statement for the record on the Federal Insurance Office

• GAO Report: Insurance Reciprocity and Uniformity
• GAO Report: A Framework for Crafting and Assessing Proposals to Modernize the Outdated U.S. Financial Regulatory System
• CRS Report for Congress: “Insurance Regulation: Optional Federal Charter Legislation”
• New York Senator Schumer and New York Mayor Bloomberg Report: “Sustaining New York’s and the U.S.’s Global Financial Leadership”
• 2008 U.S. Treasury Department Blueprint for a Modernized Financial Regulatory Structure
• ACLI Study: “The Optional Federal Charter: Implications for Life Insurance Producers”
• ACLI Study: “The Effects of an Optional Federal Charter for Life Insurers on State Economies”
• ACLI Study: “Economic Impact of an Optional Federal Charter on the Life Insurance Industry”
• ACLI Study: “State Regulation of Life Insurers: Implications for Economic Efficiency and Financial Strength”
• ACLI Study: Consumer Ramifications of an Optional Federal Charter

Read the FAQs on Insurance Regulatory Reform and Modernization

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