NU Online News Service, Nov. 12, 4:06 p.m. — Washington
The American Council of Life Insurers, Washington, will formally pursue optional federal chartering of life insurance companies, the ACLI board said today.
The board voted to formally endorse optional federal chartering at its annual meeting in Boston, after more than a year of study.
ACLI has termed regulatory reform a “survival issue” for life insurers.
“Regulatory reform and modernization is crucial to the continued success and competitiveness of life insurers,” said Joseph Gasper, president of Nationwide Financial Services Inc., Columbus, Ohio.
“In today’s rapidly evolving financial services marketplace, life insurers no longer compete only with one another,” Gasper says, “but with banks and securities firms as well.”
Gasper says banks and securities firms, due to more streamlined and centralized regulatory systems, can usually bring products to the national marketplace within 30 to 90 days.
This contrasts with six to 18 months for life insurers, he says.
“Failure to reform insurance regulation would pose a competitive burden that may threaten the viability of the life insurance industry,” Gasper says.
Gasper is the incoming ACLI board chairman.
ACLI formally began exploring optional federal chartering in June of 2000. About one year later, ACLI released a draft proposal on the issue, but it did not formally endorse federal chartering until today.
The ACLI proposal would create an Office of National Insurers at the Treasury Department, headed by a director who would be appointed by the President and confirmed by the Senate.