OFC Seems To Be Gaining Momentum

As evidenced by movement on several fronts, momentum seems to be growing for both life and property casualty insurers to have an option to operate under a federal charter within the next 2 years.

These actions include the decision of Rep. Paul Kanjorski, D-Pa., chairman of the Capital Markets Subcommittee of the House Financial Services Committee, to hold a hearing June 10 on legislation creating an insurance information office within the Treasury Department.

Creating such an office as an interim step toward a federal charter was recommended in the blueprint for financial services modernization unveiled by the Treasury Department March 31.

The board of the American Council of Life Insurers plans to decide whether it will support the legislation, H.R. 5840, at a June 13 meeting.

At the same time, Rep. Barney Frank, D-Mass., chairman of the House Financial Services, said at a meeting of life industry officials in Washington on June 2 that enactment of legislation in the next Congress creating an optional federal charter is his “top priority.”

Steven Brostoff, an ACLI spokesman, said the trade group “is greatly encouraged” by Kanjorski’s legislation, and “supports the concept that a federal office is vital to represent the U.S. internationally on insurance issues and coordinate with state insurance regulators on national concerns.

“We continue to monitor the legislation and look forward to commenting further as it evolves,” Brostoff added.

He said the ACLI expects “to see a new OFC bill next year and we look forward to working with Committee Chairman Frank and Subcommittee Chairman Kanjorski to develop a strong proposal that can advance in the new 111th Congress.”

Also reflecting the growing momentum, Catherine Weatherford, executive vice president and CEO of the National Association of Insurance Commissioners, sent a memo May 28 to insurance commissioners and the Kansas City, Mo., staff of the NAIC saying she is considering moving her office to Washington.

She said she is considering the move because “having a stronger presence in Washington, D.C., will enhance the NAIC’s availability and access to consumer organizations, the U.S. Congress and industry trade associations.”

She said the proposed change “would otherwise have little impact on our operations in Kansas City,” but that “the NAIC membership, as part of its strategic management process, has a strong vision for designing options and implementing solutions for stronger, more uniform regulatory models in the future.”

According to several ACLI lobbyists who attended the meeting, Frank said he intends “to move very quickly with OFC legislation in the next Congress.” He specifically said it would cover both life and p-c insurance.