Two House members have introduced the National Insurance Consumer Protection Act, a bill that would give insurers the option of adopting a federal charter.
The bill was introduced by Reps. Melissa Bean, D-Ill., and Rep. Edward Royce, R-Calif., lawmakers who introduced an optional federal charter bill in the previous Congress.
Advocates of the OFC approach want to let insurers choose between sticking with state charters and state regulation, or going with a new federal regulatory system.
The Bean-Royce bill would establish a “parallel, national system of regulation and supervision for insurers, insurance agencies, and insurance producers, similar to the dual banking system,” according to a summary distributed by Bean and Royce.
Regulated entities could choose between national or state regulation, unless the national commissioner and a newly created systemic risk regulator determine that an insurer is “systemically important,” in which case regulators could require the insurer to be nationally regulated, according to the bill summary.
The bill also would:
- Create an Office of National Insurance at the Treasury Department. The office would be responsible for issuing charters for life, property-casualty, and reinsurance companies, as well as licenses to producers. It would have a commissioner appointed by the president for a 5-year term, subject to Senate approval.
- Permit the national insurance commissioner to subject insurers to examinations every 2 years, and producers to examinations in response to a complaint or evidence of violation of a law or regulation.
- Give the national commissioner enforcement powers patterned after those available to federal banking agencies.
- Require state and national commissioners to share information with a systemic risk regulator, who would be able to make “corrective action recommendations” to the national and state commissioners “to mitigate or avoid actions taken by an insurer or affiliate that would have serious adverse effects on economic conditions and financial stability.”
- Authorize the systemic risk regulator to circumvent an insurance regulator in some “emergency circumstances.”