The National Conference of Insurance Legislators cites potential losses of jobs and state revenue as reasons to oppose creating an optional federal charter for insurers.
In a letter to Treasury Secretary Timothy Geithner, NCOIL leaders write that they were “taken aback” by the “pro-OFC comments” Geithner made during his first public appearance as Treasury secretary, at a Senate Banking Committee hearing.
“We are optimistic that as you review OFC proposals, you will recognize that allowing insurers to hand-pick their regulator is not in the best interest of all,” officials from NCOIL, Troy, N.Y., write in their letter, which was sent Tuesday.
The letter was signed by NCOIL President James Seward, a state senator from New York; NCOIL President-elect Robert Damron, a state representative from Kentucky; NCOIL Vice President George Keiser, a state representative from North Dakota; NCOIL Secretary Carroll Leavell, a state senator from New Mexico; and NCOIL Treasurer Vi Simpson, a state senator from Indiana.
Insurance fees, assessments, and premium taxes provide a total of about $16 billion in revenue for state insurance departments and state general funds, the NCOIL officers write.
“Vibrant insurance markets–which states have facilitated across the country–provide millions of jobs that, particularly during this time of economic crisis, [and] must be protected,” the officers write.
Giving insurers that option to choose between state and federal regulation would “irreparably damage insurance oversight by promoting regulatory arbitrage and substantially weakening consumer protections,” the NCOIL officers write. “Consumers would rather contact their local representative or state insurance department than wait in line on a 1-800 number out of Washington, D.C.”
The NCOIL officers add that state legislators would not sit idly by as others seek to weaken insurance oversight.