Insurance and banking industry officials met with Treasury Department officials on Feb. 1 in what was described by some attendees as a “courteous” meeting to discuss administration support for an optional federal charter for insurers.
The meeting was requested by Treasury as the agency considers what approach to take to legislation expected to be introduced this month by Sen. John Sununu, R-N.H., and Sen. Tim Johnson, D-S.D.
Under the bill, a federal insurance office would be established within the Treasury Department. It would be vested “with the authority to charter national companies and agencies and to implement the statute governing their activities.”
According to an outline of the bill obtained by National Underwriter, this office and the single appointed regulator responsible for its activities would regulate solvency, market conduct and accounting for federally chartered entities.
The meeting and introduction of the legislation are the opening shots in what is expected to be an intense lobbying campaign by supporters and opponents of the OFC.
The meeting with Emil Henry, assistant secretary for Financial Institutions at Treasury, was requested by the Treasury to air the arguments of OFC supporters in the insurance industry, according to Kevin McKechnie, a lobbyist for the American Bankers Insurance Association.
McKechnie declined to comment on the substance of the meeting.
The American Council of Life Insurers, a number of whose members attended the meeting and which is lobbying strongly for Congress to hold hearings soon on the Sununu/Johnson bill, also declined comment.
All ACLI spokesman Jack Dolan would say is, “We’re looking forward to the Senate Banking Committee’s review of optional federal charter legislation this year.”
Treasury officials declined to confirm or deny the meeting. “We’re not going to get in the business of confirming, denying or commenting on individual, private meetings,” a spokesman said.
The official also said that the agency, and as a result the Bush administration, “has not taken a position on the issue.”
But Lisa McGreevy, executive vice president for external affairs of the Financial Services Roundtable and president of its Government Affairs Council, said the meeting was “significant.”
The FSR represents large financial services companies, including insurers. It has established creation of an optional federal charter for both p-c and life insurers as a top priority for this year, said Steve Bartlett, FSR president, at a Feb. 2 meeting.