The insurance industry has made significant progress towards the enactment of optional federal charter legislation in 2006, but there is still a long way to go.
That was the essence of comments made by lobbyists for the American Council of Life Insurers, Washington, while speaking at the group’s annual meeting in Orlando.
“We’ve made a lot of progress this year,” said Kim Dorgan, executive vice president of federal relations for the ACLI.
Ms. Dorgan noted that bills establishing an optional federal charter for insurers have been introduced in both the House and the Senate. She added that the measure has strong bipartisan support in the Senate. In discussions with Senate staffers, Ms. Dorgan said a recurring theme is that the federal charter option is “an issue that’s time has come.”
What Your Peers Are Reading
The House version of the bill was introduced by Rep. Edward Royce, R-Calif., who Ms. Dorgan said is a strong supporter of the federal option. The measure’s main Democratic supporter, Rep. Paul Kanjorksi, D-Penn., is “not quite there on property and casualty,” she noted, but is a strong supporter of the federal option for life insurance.
Rep. Kanjorksi is in line to assume control of a key House Financial Services subcommittee should the Democrats win control of the House in November, but Ms. Dorgan noted that the Republicans maintaining control would also put key supporters of the federal option in charge of the relevant committees.
“Regardless of who has the majority, we’re in a very good position,” she said.
Despite the increasing support, Ms. Dorgan acknowledged that enactment of a federal charter option is not in the near future, predicting that passage by both chambers could take from 2 to 4 years, and perhaps 5, depending on how the ultimate bill is crafted.
Gary Hughes, executive vice president and general counsel, said that with legislation introduced, “the political people have made it possible for the substance people to get involved again” and work to resolve issues that could weaken support for the federal option within the industry. “We have a number of companies that for the first time are taking a good look at the bill” and seeing how it would affect their business, he said.
For the most part, Mr. Hughes said, the current federal charter bills “track closely with what the industry has done.”