Word out of Washington is that insurance regulation will not be part of the sweeping new rules for the financial services sector announced by President Obama on June 17.
Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, told attendees at a fund-raiser hosted by the American Council of Life Insurers that the U.S. Treasury Department is not yet ready to weigh in on the key question of an optional federal charter for insurers. He expects his committee will delve into the subject sometime around September.
ACLI is all for it. “Treasury’s proposals to enhance oversight of the insurance sector of the nation’s economy will set us on the right path towards a modern, efficient and consumer-oriented regulatory system,” said ACLI President and CEO Frank Keating in a prepared statement.
The statement goes on to say that the White Paper released by the Treasury Department on June 17 recognizes that the 135-year-old state regulatory system is “riddled with inefficiencies, inconsistencies and unnecessary barriers to competitiveness that have not been alleviated despite sincere efforts by state regulators and the National Association of Insurance Commissioners (NAIC) to advance uniformity.”
The statement goes on to say that the lack of a federal office with responsibility and expertise in insurance hampers our effectiveness in dealing with other nations on insurance-related concerns.
“ACLI therefore appreciates Treasury’s commitment to work towards modernization of insurance regulation based on the principles of national uniformity, efficiency, effective oversight of systemic risk and better international cooperation. The White Paper identifies a federal charter as one possible way to achieve those objectives. ACLI strongly supports an optional federal charter as the only way to achieve them.”