Industry Players Size Up Treasury Proposals

Kenneth Cohen, deputy general counsel at Massachusetts Mutual Life Insurance Company, Springfield, Mass., says he likes the Treasury Department’s recognition of the important role that insurance plays in our financial system.

“We must take major steps forward — including the adoption of an optional federal charter for life insurance — if the American insurance industry is to protect the interests of consumers and remain competitive globally,” Cohen says. “An optional federal charter will finally create a U.S. insurance regulatory agency with the ability to both protect consumers and help ensure the overall financial health of our industry.”

Doug Mishkin, chairman of the National Association of Independent Life Brokerage Agencies, Fairfax, Va., says the group has long supported giving insurers and insurance producers the same access to a federal regulatory system that banks and securities dealers have enjoyed.

“The U.S. Treasury’s recommendation is a significant step toward improving industry standards in an efficient manner throughout the entire 50 states,” Mishkin says.

NAILBA members are licensed in an average of 31 states each, and simply maintaining the licenses costs an average of $12,600 and 347 hours of labor per member agency per year, Mishkin reports.

Jeffery Taggart, president of the National Association of Insurance and Financial Advisors, Falls Church, Va., says NAIFA simply wants to see improvements in the product introduction and agency licensing processes.

“NAIFA is open to considering any and all regulatory options that will allow our members to better serve their clients,” Taggart says.

The options could include the Treasury Department OFC proposal, the interstate product filing compact initiative at the National Association of Insurance Commissioners, Kansas City., Mo., or a new effort to create a national producer licensing board, Taggart says.