WASHINGTON, August 31, 2007 – The National Association of Professional Insurance Agents (PIA) has sent a letter to the nation’s governors urging them to remain steadfast in their opposition to an optional federal charter (OFC) for insurers. The letter comes one week after the American Insurance Association (AIA) and the American Council of Life Insurers (ACLI) sent a letter to the National Governors Association, urging the group to reverse course and support federal OFC legislation.

PIA thanked the National Governors Association for opposing Congressional efforts to create a federal insurance regulator and said it was looking forward to continuing to work with the governors to ensure that the states’ rights were protected.

“We join you in your opposition to the federal regulation of insurance,” wrote PIA National President Donna Pile.  “We agree with your assessment of the pitfalls associated with a federal insurance regulator as you presented them in your ‘Statement on the National Insurance Act of 2006’ with the National Conference of State Legislatures.”

“The federal oversight called for by the National Insurance Act would create confusing legal questions as to who really regulates the insurance industry, thus directly undermining and interfering with the states’ right and obligation to regulate the business of insurance,” Pile said. “The bill would stifle open competition by insurers and exclude small to mid-size insurers from the market by creating an atmosphere that favors large national and international corporations, which would inevitably result in fewer choices for consumers.

Former South Carolina Gov. Jim Hodges provided PIA with a statement of opposition to optional federal charters and in support of state regulation.

“As a former governor of South Carolina, I can tell you that creating a new federal insurance bureaucracy in Washington, D.C. and splitting the regulation of insurance between a federal regulator and state regulators would be a nightmare for consumers, companies, and regulators,” said Hodges.

“I know first hand how responsive the states are to consumers,” Hodges said. “Frankly, the federal government is not capable of providing that same level of responsiveness. Further, the loss of revenue to the states when companies choose a federal charter would be devastating, especially at this time when states are facing budget shortfalls. For all these reasons, I am opposed to an optional federal charter for insurance. The more appropriate action would be to support ongoing efforts to modernize the state system.”

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street America (SM). PIA’s web address is www.pianet.com.

PIA President Pile’s Letter to the National Governor’s Association (PDF file)