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Regulation and Compliance > Federal Regulation

Germans Back OFC Concept

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WASHINGTON BUREAU — The German Insurance Association is urging Congress to create an optional federal charter for insurers.

Two top officers of the association, which is known as the Gesamtverband der Deutschen Versicherungswirtschaft e.V., or GDV, in Germany, have sent a letter to Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, and Rep. Spencer Bachus, R-Ala., the highest-ranking Republican on the committee.

Federal regulation would promote “better regulation with no less scrutiny” than under the current system, and an OFC would “increase the prospect of greater international cooperation,” Rolf-Peter Hoenen, president of the GDV, Berlin, and Jorg von Furstenwerth, chairman of the GDV’s executive board, write in the letter.

H.R. 1880, a bill introduced by Reps. Melissa Bean, D-Ill., and Ed Royce, R-Calif., that would give insurers the option of choosing between state regulation and federal regulation, should be amended to “explicitly provide for enhanced cross-border supervisory cooperation,” Hoenen and von Furstenwerth write. “This would help to avoid cost-intensive overlaps in regulation and would ultimately result in lower costs for American and European consumers.”

Hoenen and von Furstenwerth sent the letter to express support for H.R. 1880.

Except in the United States, national insurance and reinsurance markets have become more and more integrated on regional and global levels, Hoenen and von Furstenwerth write.

“Establishing an option for insurance supervision at the federal level in the U.S. would certainly help to promote the mutual recognition between insurance supervisory authorities in the U.S. and in the European Union,” Hoenen and von Furstenwerth write. “We know that this development is strongly supported by those U.S. companies that are members of our trade association who are doing business in German and other EU nations.”


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