A New England Republican lawmaker who once served as an insurance regulator says she is against the idea of letting insurers and producers choose between being regulated by state agencies or by a federal agency.
Sen. Susan Collins, R-Maine, talked about her views on the optional federal charter, or OFC, concept today here during a meeting of the Independent Insurance Agents & Brokers of America Inc., Alexandria, Va.
“I believe the present system of state regulation largely works,” Collins said. “The answer is not to disrupt that system by concentrating more power in Washington, D.C.”
Collins, who for 5 years headed the Maine Department of Professional and Financial Regulation, which oversees Maine’s Bureau of Insurance, said she, unlike the majority of members in Congress, understands the insurance industry and believes most states perform the task of regulation “quite well.”
Creating a federal system would at some point overwhelm the current system of state regulation, making it ineffective and nonexistent, Collins said.
U.S. Treasury Department spurred conversations about the OFC concept earlier this week, when Treasury Secretary Henry Paulson released a financial services reform “blueprint report” that recommended creating an optional charter for both life and property-casualty insurers.
Collins said the news that insurance would be part of the reform package came as a surprise to her.
“Certainly, the ongoing struggle in the insurance sector needs to be addressed, but I fail to see how the crisis in the housing and financial markets justifies the reach of federal regulators into the insurance industry,” Collins said.
Collins called on agents and brokers to use their knowledge and influence to speak to their federal legislators and inform them of the benefits in keeping the current system.
“Your continued advocacy on this point, now that Secretary Paulson has embraced this proposal, is going to be absolutely critical,” Collins said.