Companion legislation to a bill creating an option federal charter for insurers introduced in the Senate in May was unveiled in the House before it left for the August recess.
The bill, the National Insurance Act of 2007, was introduced by Rep. Melissa Bean, D-Ill., and Rep. Ed Royce, R-Calif., who said they had won a commitment from the Democratic leadership of the House Financial Services Committee to hold hearings on the legislation soon.
The bill has garnered support from 11 financial institution trade groups, including the American Council of Life Insurers.
In a statement issued as the bill was introduced, Bean said, “Regulatory obstacles currently discourage insurance innovation and nimble product development to capitalize on emerging growth markets.
“Eliminating the need to coordinate with 51 state regulators and accelerating the time to market potential will foster greater industry innovation and agility,” she added.
Both Bean and Royce noted that the current state-based regulatory system for insurance had created a $24 billion negative trade deficit in insurance markets in 2006, while banks, which have a group of federal regulators, have a substantial positive trade position.
The legislation creates a federal system of regulation and supervision for insurers as well as agents and brokers that is similar to the dual banking system.
Under the bill, insurers and producers would both be free to elect federal or state regulation, charters, and licenses and states would maintain responsibility for regulating state-licensed insurers and producers.