The Association of Advanced Life Underwriting says it wants to know about the fine details in any proposals to give insurers a choice between state and federal oversight.
Rep. Ed Royce, R-Calif., drew attention to the optional federal charter concept Sept. 28, when he introduced H.R. 6225, the National Insurance Act of 2006.
In a statement to members, the AALU, Falls Church, Va., says it “could be helpful for producers and clients to have a federal regulator with expertise on life insurance issues who has the same kind of credibility with Congress and the administration that the Office of the Comptroller of the Currency has on banking issues.”
On the other hand, the primary risk of OFC legislation is that “federal regulation of life insurance has not yet been tried and there could be significant harm if poor regulation results,” the AALU says.
“AALU does not currently believe this is likely, but it is important that risk be mitigated by the specifics of the national regulatory structure that is created and by ongoing regulatory choice for life insurance producers and carriers,” the AALU says.
The American Council of Life Insurers, Washington, is supporting the idea of OFC legislation.
The AALU’s sister organization, the National Association of Insurance and Financial Advisors, Falls Church, Va., is staying neutral.