Federal Chartering Unlikely To Pass This Session

NU Online News Service, May 9, 4:55 p.m. — New York

Speakers agreed here Wednesday that Congress is unlikely to create a “federal charter option” for insurers during the current session.

The federal charter option proposal now in play on Capitol Hill would give insurers the choice of staying with state insurance regulators or applying for a federal charter and coming under the jurisdiction of a new, federal insurance regulatory agency that would resemble the Office of the Comptroller of the Currency.

An optional federal charter would create “uniformity and efficiency” but insurers could not use it to escape regulation, Gary Hughes, general counsel of the American Council of Life Insurers, Washington, said here at an executive life insurance conference organized by PricewaterhouseCoopers L.L.P., New York.

ACLI has been working hard to promote the federal charter proposal.