He May Be My Brother, But He Is Getting Heavy
If the life insurance industry seriously intends to pursue optional federal chartering, then it needs to redefine the debate over insurance regulation.
It needs to separate itself, clearly and emphatically, from the property-casualty industry, creating its own unique identity as a provider of financial services.
Above all, it needs to re-educate the nations policymakers so they will think of life insurers in a new and distinct light, not just as simply one branch of a massive, amorphous “insurance industry.”
This may seem like a radical notion, but if one thing is clear from recent House and Senate hearings on insurance regulation, it is that this is necessary if optional federal chartering of life insurance companies is to have any chance of enactment in the foreseeable future.
OFC already is severely mired in concerns that have nothing to do with life insurance. Issues such as rate regulation, data collection and residual market mechanisms have no particular relevance to life insurance; they are largely, if not exclusively, p-c concerns.
But these are issues that members of Congress raise during their deliberations on OFC.
Meanwhile, the p-c industry itself is hopelessly divided. While one major p-c company association supports OFC, three others oppose it. Also opposing OFC is the p-c industrys largest producer group, which is suggesting minimum federal standards as an alternative.
It is impossible to imagine that Congress will enact something as significant as OFC, a departure from a century and a half of insurance regulation, when there is such powerful opposition coming from the “industry” itself.