State legislators say they want to forge stronger ties with state insurance regulators but are disappointed with the regulators’ position on the proposed federal Office of Insurance Information.

The lawmakers appeared with regulators here at the summer meeting of the National Conference of Insurance Legislators, Troy, N.Y.

In June, an official from the National Association of Insurance Commissioners, Kansas City, Mo., testified at a hearing of the House Financial Services Committee capital markets subcommittee that the NAIC was giving the OII bill “conditional support,” as long as the powers granted to the OII were not expanded during the legislative process.

The NAIC feels it has to participate in any discussions about an OII bill so that it will not be “shut out of the discussion,” said West Virginia Insurance Commissioner Jane Cline, an NAIC vice president.

Rather than letting the “camel’s nose” of federal regulation under the tent, offering conditional support for the OII bill is a way to prevent the camel’s nose from becoming larger, Kansas Insurance Commissioner Sandy Praeger, the NAIC president, said at another meeting session.

But state Rep. Brian Kennedy, D-Hopkinton, R.I., the president of NCOIL said he was baffled by the NAIC’s conditional support for a bill that could pre-empt state insurance regulation.

“I felt sold out,” said North Dakota Rep. George Keiser, R-Bismarck, N.D. “I’m not looking for a seat at the table…. If we’re going to have a federal charter, then let them have it. Let them take the calls you take. Let’s go all the way or let’s maintain state control.”

New York state Sen. William Larkin Jr., R-New Windsor, N.Y., said replacing the current state-run insurance regulatory system with a federal regulatory system could cost the state $3.3 billion in revenue and 1,400 insurance department jobs.

Larkin expressed disappointment about the NAIC’s position on the OII bill and charged that the NAIC is a 501(c)(3) nonprofit group that is being run by its staff rather than by state insurance commissioners.

Cline said the number of insurance commissioners at NCOIL’s meeting demonstrated the NAIC’s desire for a cordial relationship.

Keiser agreed on the need for a partnership.

“No one is well served by fighting,” Keiser said.