Members of the National Association of Insurance and Financial Advisors board of trustees voted Friday in favor of offering conditional support for letting life insurers choose between state and federal regulation.
The trustees of NAIFA, Falls Church, Va., endorsed a measure recommending that NAIFA’s governing body consider backing optional federal charter legislation.
The trustees qualified that support for the OFC concept by recommending that NAIFA work to ensure that any bill passed give NAIFA members flexibility, according to a letter to NAIFA’s leaders that the trustees released today.
The NAIFA board policy formation subcommittee has recommended that NAIFA should “continue to support the principles underlying state regulation of the business of insurance and efforts to improve the state-based system of insurance regulation; and amend the current NAIFA policy on insurance regulatory reform to include support of the OFC concept provided that several conditions are met,” the trustees write in the letter.
“We believe any modernization proposals should promote consumer protection, streamline agent licensing, improve product speed to market, and improve the competitiveness of the insurance industry,” the trustees write.
And, if a National Insurance Act does become law, “we want our members to have the option to remain licensed and regulated at the state level,” the trustees write.
The trustees acted after representatives for large insurers assured them in 2 separate meetings that major life insurers that chose federal charters would not insist that affiliated agents and brokers also become federally chartered, according to a life company executive who asked not to be named.
If the NAIFA governing body acts on the trustees’ recommendation, the decision will mean that all major life insurance industry trade groups are backing the OFC concept.
The NAIFA trustees’ action “is good news,” says Jack Dolan, a representative for the American Council of Life Insurers, Washington. “An OFC offers producers and consumers many benefits.”
Dolan says the ACLI believes the current NIA bill addresses concerns about producer flexibility.
“The bill, as written, permits insurance agents to sell for national companies on a state-issued license,” Dolan says. “We have pointed that out to agents groups to try to encourage their support for OFC.”
,” says Jack Dolan.