Life insurance carrier and producer groups are starting to give their reviews of the insurance regulation provisions in the U.S. Treasury Department’s new financial services “reform blueprint” report.
Treasury Department officials call for setting up a temporary insurance data-gathering office within the department, then setting up an Office of National Insurance that would give insurers and producers the option of choosing to come under the jurisdiction of a federal insurance regulator.
Eventually, officials say, the government should establish offices that would handle matters such as market conduct for all types of financial services products.
Rep. Paul Kanjorski, D-Pa., chairman of the capital markets subcommittee at the House Financial Services Committee, already plans to hold a hearing on the blueprint April 16, according to industry sources.
Frank Keating, president of the American Council of Life Insurers, Washington, has praised the provisions in the blueprint calling for the creation of an optional federal charter system.
“The proposal for change comes at a propitious time,” Keating says. “Congress will soon examine the causes behind the recent market turbulence and re-start its review of insurance regulation reform legislation.”
Studies conducted for ACLI suggest that an OFC system would lead to lower premiums for consumers, and authors of one study estimated an OFC system could save up to $5.7 billion, Keating says.
“ACLI is dedicated to improved efficiencies at the state level as well, so that these same benefits will be realized for consumers of companies that choose to remain state regulated,” Keating says.