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Business Group Backs Federal Regulation Option

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The Business Roundtable is asking congressional committee leaders to give insurers the option of choosing between state and federal regulation.

“Our current state-based insurance regulatory structure is one that reflects an economy as it existed in the mid-20th century,” Business Roundtable President John Castellani writes in a letter sent to House Financial Services Committee Chairman Barney Frank, D-Mass., and Rep. Spencer Bachus, R-Ala., the most senior Republican on the committee.

The Business Roundtable, Washington, also sent the letter to Senate Banking Committee Chairman Christopher Dodd, D-Conn., and Sen. Richard Shelby, R-Ala., the most senior Republican on that committee.

The old insurance regulatory structure “simply doesn’t work now,” Castellani writes. “The result has been an outdated, inefficient regulatory regime that stifles innovation, denies customers the best products at the most competitive prices, and harms competitiveness.”

The Optional Federal Charter Coalition, Washington, a group that supports OFC proposals, pointed to the Roundtable’s support as evidence that the OFC concept is important enough to draw support from outside the insurance industry.