A House Financial Services Committee panel is expected to begin hearings on state regulation and optional federal chartering of insurance companies in June, the National Underwriter has learned.
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 told National Underwriter that they expect to see a total of three hearings during 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 (OFC).
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 ACLI, says he views the upcoming hearings as the beginning of the dialogue on the need for OFC.
He hopes to demonstrate, he says, 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, Anderson says, will work with other members of the Financial Services Coordinating Council to make the case for OFC.
In addition to ACLI, FSCC members include the American Insurance Association, the American Bankers Association and the Securities Industry Association, all of Washington.
AIA has developed an OFC proposal focused on property-casualty insurers.
ABA, through its affiliate, the American Bankers Insurance Association, also has developed an OFC proposal.
Among agent/broker groups, the Washington-based Council of Insurance Agents and Brokers also favors OFC.
But Maria Berthoud, senior vice president of federal government affairs for the Alexandria, Va.-based Independent Insurance Agents and Brokers of America, says she looks forward to the hearings as the beginning of a substantive dialogue on the importance of state regulation.
IIABA supports using federal government tools to help modernize state insurance regulation, but opposes optional federal chartering.
“While ACLI and others that support OFC will certainly testify, IIABA will also testify in favor of a more pragmatic solution,” Berthoud says.
IIABA, she says, believes that the goal of reforming state insurance regulation can be accomplished without creating a new bureaucracy in Washington.
Perhaps in preparation for the hearing, FSCC has developed a set of uniform principles for federal insurance regulation, the National Underwriter has learned.