Life Insurance-Only Federal Charter Option Seen As A Possibility
A comprehensive optional federal chartering bill is seen as a long shot in Congress next year, but a life insurance-only proposal could draw broader support, some industry representatives say.
“I dont believe that any legislation, whether OFC or federal minimum standards, has much of a chance next year,” says David Farmer, senior vice president of federal affairs for the Downers Grove, Ill.-based Alliance of American Insurers, a major property-casualty group.
“If anything has a chance of moving, it is a life insurance-only OFC proposal,” Farmer says.
Julie Gackenbach, assistant vice president of government relations with the Des Plaines, Ill.-based National Association of Independent Insurers, another p-c association, agrees. “People on Capitol Hill understand the differences between life and p-c, and there is a lot of sympathy for the plight of life insurers,” she says.
Allen Caskie, chief counsel for federal relations with the American Council of Life Insurers, says ACLI is not pushing for a life insurance-only bill.
ACLI is working in a coalition with the American Insurance Association, a p-c group, the American Bankers Association and the Securities Industry Association, for a comprehensive OFC bill.
“We want the broadest support possible,” Caskie says. But it is possible someone will introduce a bill that would implement OFC on a line-by-line basis, he adds.
“It is conceivable that at some point, a life-only bill may surface,” Caskie says.
Still, he believes the Financial Services Committee will begin with a different approach.
A lot depends on the amount of progress made by the National Association of Insurance Commissioners, according to Caskie.
NAIC, he notes, is still working on developing an interstate compact aimed at streamlining insurance regulation. However, Caskie says, that effort has bogged down and it is not clear how it will play out.
“Mike Oxley (the Ohio Republican who chairs the Committee) is willing to give the states plenty of time to work out the problem areas,” he says. However, he adds, if there is no interstate compact, he believes Oxleys first instinct will be to look at an approach similar to the National Association of Registered Agents and Brokers.
NARAB, a feature of the Gramm-Leach-Bliley Act, gives states a defined time frame to harmonize their agent licensing requirements. If the requisite number of states fail to act, a national organization would come into being to streamline the agent licensing process.
Caskie says this approach would give states a certain amount of time to achieve uniformity.
Reproduced from National Underwriter Life & Health/Financial Services Edition, December 2, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.