The National Association of Insurance Commissioners says it prefers the House version of a major financial services bill, H.R. 4173, the Wall Street Reform and Consumer Protection Act.

The NAIC, Kansas City, Mo., has sent congressional leaders expressing support for insurance sales and marketing provisions in the House version and for House version provisions that deal with the role of the states in regulating insurance.

House and Senate representatives are expected to start formal efforts to develop a compromise version of H.R. 4173 Thursday.

The NAIC today held a news conference to give its views on the legislation.

“We must consider the impact the final bill will have on state-based regulations,” said NAIC President Jane Cline, the West Virginia insurance commissioner.

Cline said state regulation of insurance is effective and important, adding that it has worked well and is a “gold standard.”

Althought the NAIC continues to emphasize its belief that states should continue to regulate insurance, the NAIC is supporting the House bill Financial Services Oversight Council provision. The provision would create a federal council that would advise Congress on financial domestic and international regulatory and market developments, in the insurance market as well as in other financial services markets.

The House version of the council would let state banking, securities and insurance regulators be non-voting members.

The NAIC also wants to see Congress let insurers continue to use derivatives-based hedging strategies, and it wants Congress to exclude insurance companies from federal “systemic risk” regulation, or regulation of financial services company financial problems with the potential to disrupt the U.S. financial system.

President Obama wants Congress to come up with an agreement on the bill before he leaves for the Group of 20 meeting this month in Toronto. He hopes to sign a financial reform bill into law by July 4.