A rift has erupted between 2 financial services trade groups over how best to modernize the insurance regulatory system.[@@]
In a statement Tuesday, the Optional Federal Charter Coalition, Washington, voiced “disappointment” and called “inaccurate” the reaction of the Independent Insurance Agents and Brokers of America, Washington, to a letter the OFCC sent to the Senate Banking Committee June 13.
The OFCC letter, signed by 135 financial services industry companies, says that the current insurance regulatory system is broke and that the most appropriate way to deal with the system is to provide companies with an option to have a federal insurance charter.
The letter sent by the so-called “Big I” in response says an optional federal charter is unnecessary and that legislation now being drafted by the U.S. House Financial Services Committee creating so-called federal standards for insurance regulation is more appropriate. The lawmakers working on the House “State Modernization and Regulatory Transparency” Act bill, or SMART Act bill, hope to introduce it before Congress leaves for its summer recess. The month-long recess is supposed to start July 29.
The SMART Act bill is being drafted by Rep. Michael Oxley, R-Ohio, chairman of the House Financial Services Committee, and Rep. Richard Baker, R-La., chairman of the committee’s Capital Markets Subcommittee.
When asked about the latest OFFC statement, the Big I denied any inaccuracies.
Members of the OFCC include the American Insurance Association, the American Council of Life Insurance and the Council of Insurance Agents and Brokers, all of Washington.