The Association of Advanced Life Underwriting last week joined several other insurance trade groups in voicing support for the “concept” of an optional federal charter.
Other life insurance industry supporters of an OFC include the American Council of Life Insurers.
At the same time, the National Association of Insurance and Financial Advisers remains neutral, saying it will work with both federal and state officials to improve regulation of the life insurance industry.
“NAIFA is committed to improving the state-based regulatory system and remains open to good-faith reform initiatives, state or federal, that will help agents better serve the public,” said John Davidson, NAIFA’s newly elected president, an insurance agent based in Thousand Oaks, Calif.
In a statement to members, the AALU said the advantage of the “concept” of OFC legislation is that 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.”
The “primary risk” of OFC legislation, the AALU said, is that “federal regulation of life insurance has not yet been tried and there could be significant harm if poor regulation results.”
The position paper added that, “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 statement was prompted by the Sept. 28 introduction of H.R. 6225, the National Insurance Act of 2006, by Rep. Ed Royce, R-Calif.