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Rep. Kanjorski's Hometown Newspaper Opposes Optional Federal Charters

Major insurance companies operating in the U.S. "Are trying to get Congress to enact a back-door reduction in insurance regulation," asserts an editorial in The...
April 28, 2009

Major insurance companies operating in the U.S. "Are trying to get Congress to enact a back-door reduction in insurance regulation," asserts an editorial in The Citizens' Voice of Wilkes-Barre, Penna. The editorial noted that insurers say the failures of American International Group are evidence that the current system doesn't work, but they are wrong because that was a failure of the federal government, not state regulators.

"Big insurance companies want a system that would allow them to select federal or state charters, thus enabling them to choose the level of regulation they prefer, rather than requiring them to adhere to regulations where they do business," the editorial states. "The system they seek is akin to the current bank regulation system. Abuses committed by some of the nation's biggest banks under that system don't recommend it as a model for insurance regulation. And establishing superseding federal regulations would substantially increase costs for small regional insurers, putting them at a disadvantage against the bigger companies."

The Citizens' Voice of Wilkes-Barre is the hometown newspaper of Rep. Paul Kanjorski (D-Penna.), chairman of the Capital Markets Subcommittee of the House Financial Services Committee and a backer of the so-called optional federal charter. The newspaper suggested that Rep. Kanjorski "should lead the fight against the back-door reduction in insurance regulation."

Insurance Companies Shouldn't Shop for Regulation Deals (Citizens Voice, Wilkes-Barre Pa. 4/24/09)