ACLI Will Work With P-C Group To Harmonize Their Charter Proposals
The American Council of Life Insurers will work with the American Insurance Association, a leading property-casualty group, to harmonize the administrative aspects of their proposals for optional federal chartering of insurance companies, an ACLI executive says.
Gary Hughes, senior vice president with ACLI, says he is encouraged with the AIA proposal from an administrative standpoint.
The Washington-based AIA recently introduced a federal chartering proposal for p-c insurers and says it will work for its enactment on Capitol Hill.
Hughes says the ACLI board recently voted not to seek federal chartering legislation at this time. (For more on this, see this weeks D.C. Dispatch on page 50.)
Hughes notes that while life and p-c insurance are all part of the business of insurance, they represent discrete lines that are regulated differently in the states today.
ACLIs view on optional federal chartering is that if a common administrative structure is developed, the different regulatory needs of life insurers and p-c insurers can be plugged into it, Hughes says.
While there are some differences between AIAs proposal and the one developed by ACLI, he says, they are relatively small and can be worked out.
Meanwhile, the p-c industry remains sharply divided over state vs. federal regulation. Reactions ranged from strong support to disappointment.
The Washington-based Council of Insurance Agents and Brokers offered the strongest backing to AIA.
“We support the AIA without reservation,” says Council President Ken A. Crerar.
He calls optional federal chartering “perhaps the most fundamental and important issue affecting regulation of the insurance industry.”
Crerar notes that in the early 1990s, AIA broke new ground by supporting the concept of a federal charter. “At the time, theirs was a minority viewpoint and a courageous one.”
He says he hopes the AIA action will move the political dynamic forward and help keep states focused on the urgent need for market-based regulatory reforms.
But Rodger S. Lawson, president of the Downers Grove, Ill.-based Alliance of American Insurers, disagrees with AIAs support for federal chartering.