The House sponsors of H.R. 3200, a bill that would give insurers the option of choosing between a federal charter and a state charter, today said the American International Group Inc. rescue is a “startling indication of the need to establish an optional federal charter for insurance.”
“This unprecedented move by the Fed highlights the dangers of letting a 19th-century system govern a 21st-century marketplace,” Rep. Melissa Bean, D-Ill., says in a statement.
“Our largest insurers are too complex, too interconnected worldwide, to allow the limited resources of state regulators to serve as the only option for oversight,” Bean says.
The bill cosponsor, Rep. Ed Royce, R-Calif., says, “Congress needs to address this matter before the Federal Reserve is forced to step in again.”
The insurance marketplace “requires a world class regulator with the authority to adequately oversee these firms,” Royce sqys.
Royce notes that at the end of 2007 AIG, New York, had assets over $1 trillion, larger than the GDP of 47 states.
“Clearly the status quo is no longer an option,” Royce says.