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Supporters of Federal Insurance Regulation Redouble Their Efforts

One day before the Obama administration issued its report on regulatory reform which did not recommend federal regulation of insurance, Rep. Paul Kanjorski (D-Pa.) was...
June 24, 2009

One day before the Obama administration issued its report on regulatory reform which did not recommend federal regulation of insurance, Rep. Paul Kanjorski (D-Pa.) was arguing for greater federal involvement. The Chairman of the House Financial Services Capital Markets Subcommittee called for direct federal regulation over bond insurers, mortgage insurers and reinsurers. He spoke at a hearing he called on systemic risk and insurance. "I believe that only ostriches can now deny the need for establishing a federal insurance resource center and a basic federal insurance regulatory structure," Kanjorski said.

Since the Administration report was released, groups supporting a so-called optional federal charter have made clear that they will keep pushing for one. Foremost among the groups are the American Insurance Association (AIA), the Financial Services Roundtable (FSR), and the American Council of Life Insurers (ACLI). Of these, the Financial Services Roundtable is taking the lead. Meanwhile, among carrier groups, the Property Casualty Insurers Association of America (PCI) and the National Association of Mutual Insurance Companies (NAMIC) line up with PIA's position. The group "Agents for Change," which claims to have 7,000 insurance agents as members (start-up funding for this group was provided by the Roundtable, according to press reports), will be meeting with lawmakers on Capitol Hill this week.

What It Means to Agents:  The threat of federal regulation of insurance hasn't gone away simply because the Treasury Department's report did not specifically recommend it. If anything, the Treasury's report galvanized supporters of federal regulation to redouble their efforts to attempt to advance their position as Congress crafts regulatory reform legislation. That's why supporters of state regulation must remain on guard. While it is heartening to note that neither the Obama administration's nor the House Republicans' regulatory reform plans proposes federal regulation of insurance, this is no time for us to let up.

New York Times Editorial Calls for Defeat of Optional Federal Charter