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Life Health > Life Insurance

Treasury To Hear Optional Federal Charter Proposal

By Arthur D. Postal

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Insurance and banking industry representatives will talk about a possible optional federal charter for insurance companies when they meet Wednesday with a top Treasury Department official.

Treasury Department officials asked for the meeting as the agency considers what approach to take to an OFC bill that may be introduced in February by Sens. John Sununu, R-N.H., and Tim Johnson, D-S.D.

The bill could give life and property-casualty insurers the option of being regulated by a Treasury Department agency.

The Treasury Department scheduled the meeting with industry representatives and Emil Henry, assistant secretary for financial institutions at the Treasury Department, to learn more about the views of OFC supporters in the insurance industry, according to Kevin McKechnie, a lobbyist for the American Bankers Insurance Association, Washington.

Treasury officials are interested “because there has been a lot of talk about the issue,” McKechnie says.

Sununu and Johnson’s offices were not immediately available to comment on the OFC bill, but Dennis Kelly, a spokesman for the American Insurance Association, Washington, says, “Indications are that the bill will be introduced later in February.”

The American Council of Life Insurers, Washington, “certainly supports the optional federal charter, and we are looking forward to the introduction of such legislation in the Senate,” ACLI spokesman Jack Dolan says in a statement. “To learn exactly when a bill will be introduced, best to contact sponsors.”

According to an outline of the Sununu-Johnson bill, a federal insurance office inside the Treasury Department would be vested with the authority to charter national companies and agencies and to implement the statutes governing their activities.

The federal insurance office and the appointed regulator responsible for its activities would regulate solvency, market conduct and accounting for federally chartered entities, according to the outline.

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