The House Financial Services Committee could work on creating a federal regulation option for life insurers before working on making that option available to property-casualty insurers.
Rep. Barney Frank, D-Mass., chairman of the committee, talked about the possibility of “bifurcation” of life and p-c “optional federal charter” efforts today at a press conference.
Rep. Paul Kanjorski, D-Pa., chairman of the Financial Services Committee’s capital markets subcommittee, will hold several hearings on the idea of giving insurers the option of choosing a federal charter, Frank said.
Updating the current state-based regulatory system could be helpful in international relations, Frank said.
Every time Frank talks with foreign regulators, they mention the difficulty that insurers in their countries have with dealing with each U.S. state separately, Frank reported.
No final decisions have been made about how the Financial Services Committee will handle the OFC issue, but proposals to let p-c insurers go with a federal regulator seem to be more controversial than proposals to offer a federal charter option to life insurers, Frank said.
The American Council of Life Insurers, Washington, supports H.R. 3200, a bill that would establish an OFC system both for life insurers and for p-c insurers, according to ACLI spokesman Steve Brostoff.
Life and p-c are certainly different industries, “as reflected by the fact that every state insurance department has separately staffed life and p-c divisions,” Brostoff says.
But a “comprehensive approach is the best way to proceed,” Brostoff says.