Banking Panel Chair Supports Life OFC Concept

By Arthur D. Postal

April 02, 2008 at 05:59 AM

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Sen. Christopher Dodd said Tuesday he would support legislation giving life insurers the option of choosing to be regulated by a federal agency.

Dodd, D-Conn., chairman of the Senate Banking Committee, said he does not believe the case for property-casualty insurers is as clear, but he said the committee probably will hold hearings on the idea of creating an optional federal charter for all insurers.

The American Council of Life Insurers, Washington, welcomed Dodd's remarks about the OFC effort.

"While it's still early in the process, we are pleased that an OFC is under serious discussion," the ACLI said in a statement.

The OFC topic came up on the Senate floor, while Dodd was waiting to speak about housing legislation.

When asked for comments about the U.S. Treasury Department's new financial services reform blueprint report, Dodd said he would have an easier time making a case for creating a federal regulatory option for life insurers than for p-c insurers.

"There's some very legitimate issues why state regulation makes more sense in the property-casualty area and why federal regulatory scheme makes more in the life area," Dodd said.

At the Senate Banking Committee, insurance regulatory reform "is a matter we're already talking about," Dodd said.

Dodd cited Sen. Timothy Johnson, S.D., as an example of a committee member with a strong interest in insurance regulatory reform.

"We're going to try, in this whole idea of the optional federal charter; we're looking at that, will probably hold some hearings on it," Dodd said.

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