Efforts to update the financial services regulatory structure should focus on making regulators more accountable, according to officials at the U.S. Government Accountability Office.

GAO officials give that assessment in a new report to members of Congress that describes a framework for crafting and assessing proposals for modernizing the financial regulatory system.

Policymakers also should ensure that “appropriate determinations are made about how extensive such regulations should be, considering that some activities may require less regulation than others,” GAO officials write in the report.

Today, “responsibilities for overseeing the financial services industry are shared among almost a dozen federal banking, securities, futures, and other regulatory agencies, numerous self-regulatory organizations, and hundreds of state financial regulatory agencies,” officials write.

In the insurance sector alone, 55 state, territorial and other local jurisdictions share regulatory responsibilities, officials write.

“The portion of firms operating as conglomerates that cross financial sectors of banking, securities, and insurance increased significantly in recent years, but none of the regulators is tasked with assessing the risks posed across the entire financial system,” officials write.

The American Council of Life Insurers, Washington, is one of the organizations that reviewed a draft of the report.

The authors of the report should have given more attention to insurance regulatory reform, Julie Spiezio, an ACLI senior vice president, writes in the letter.

The report demonstrates the need for a federal insurance regulatory agency and an optional federal charter system, Spiezio writes.

An optional federal charter system would permit insurers to choose between continuing to come under the jurisdiction of state insurance regulators and coming under the jurisdiction of a federal agency.

President-elect Barack Obama said Wednesday on CNBC that he expects to work with members of Congress, including Senate Banking Committee Chairman Sen. Christopher Dodd, D-Conn., and Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, to come up with a proposal for a “substantial overhaul” of the current financial services regulatory system by April 1.

International coordination will be involved, Obama said.

“We’re going to have better enforcement, better oversight, better disclosure, increased transparency,” Obama said. “We’re going to have to look at this alphabet soup of agencies and figure out how do we get them to work together more effectively…. We’ve got to stop splintering functions in such a way that capital in one form is treated one way, and capital in another form is treated another way, because, these days, in global financial markets, they’re all fungible.”