NU Online News Service, May 16, 1:05 p.m. — Washington
A House Financial Services Committee panel is expected to begin hearings on state regulation and optional federal chartering of insurance companies in June.
A committee representative confirmed that the Capital Markets Subcommittee, which is chaired by Rep. Richard Baker, R-La., is planning a series of hearings.
Industry representatives say they expect to see a total of three hearings in June, each of which will be about one week apart.
The hearings will examine the state of insurance regulation and the issues surrounding optional federal chartering.
While the senior Democrat on the Financial Services Committee, Rep. John J. Lafalce, D-N.Y., has introduced an optional federal chartering bill, H.R. 3766, it is not expected to be the focus of the hearings.
Phil Anderson, senior vice president of government affairs with the American Council of Life Insurers, Washington, says he views the upcoming hearings as the beginning of the dialogue on the need for optional federal chartering.
He hopes to demonstrate that the issue has wide support among insurance companies, both life and property-casualty, agents and others within the financial services community, such as banks.
ACLI will be working with other members of the Financial Services Coordinating Council, Washington, to make the case for optional federal chartering.
In addition to ACLI, FSCC members include the American Insurance Association, the American Bankers Association and the Securities Industry Association, all of Washington.
Another group, the Independent Insurance Agents and Brokers of America, Alexandria, Va., is taking a different approach.
“While ACLI and others that support OFC will certainly testify, IIABA will also testify in favor of a more pragmatic solution,” says Maria Berthoud, IIABA’s senior vice president of federal government affairs.
IIABA supports using federal government tools to help modernize state insurance regulation, but it opposes optional federal chartering. The group believes that the goal of reforming state insurance regulation can be accomplished without creating a new bureaucracy in Washington, Berthoud said.