Sen. Charles Schumer is back in the optional federal charter game.
Schumer, D-N.Y., and New York Mayor Michael Bloomberg, a Republican, made headlines Monday when they unveiled a report from consultants at McKinsey & Company, New York, that found that red tape could cost New York its position as a world financial capital.
In one section, the consultants suggest that giving insurers a choice between state regulation and federal regulation could make New York more appealing, by helping to lower U.S. insurers’ compliance costs and reduce barriers to entry for foreign insurers.
The property-casualty trade groups that opposed the old OFC proposals have lined up to criticize the McKinsey consultants’ OFC proposal, and the life groups and other groups that belong to the Optional Federal Charter Coalition, Washington, have lined up to support the proposal.
“The coalition believes the new report will add vitally important information to the discourse on the need for insurance regulation reform,” say officials at the OFC Coalition.
The coalition represents many financial services groups, including the American Bankers Association, Washington; the American Council of Life Insurers, Washington; and the National Association of Independent Life Brokers, Fairfax, Va.
Meanwhile, Schumer has emphasized his interest in continuing to fight for the creation of a federal insurance regulatory system.
President Theodore Roosevelt, a Republican, suggested in his 1904 State of the Union address that Congress consider giving the old federal Bureau of Corporations the power to regulate insurance companies, according to a text of the address posted on the TeachingAmericanHistory.org Web site.
But Schumer unveiled the first modern OFC bill in December 2001. Interest in the Schumer OFC bill dwindled in early 2002, when it ran into fierce opposition and competition from competing OFC proposals. The bill never received a bill number or appeared in the Federal Register.
Schumer continues to serve on the Senate Banking, Housing and Urban Affairs Committee, along with Sen. Tim Johnson, D-S.D., and Sen. John Sununu, R-N.H., lawmakers who introduced a more visible Senate OFC proposal of their own in April 2006.
The McKinsey consultants note that members of Congress are likely to reintroduce OFC legislation sometime in the near future.