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OFC Supporter Bean Concedes House Race, Co-sponsor Says OFC Push to Continue

One half of the congressional duo that has been agitating for federal regulation of insurance has lost her bid for re-election, but her ideological counterpart...
November 23, 2010

One half of the congressional duo that has been agitating for federal regulation of insurance has lost her bid for re-election, but her ideological counterpart is vowing to press on. Rep. Melissa Bean (D-Ill.) lost to Republican Joe Walsh by fewer than 300 votes in a race that was too close to call for two weeks. She co-sponsored unsuccessful Optional Federal Charter (OFC) legislation with Rep. Ed Royce (R-Calif.) in each of the past two Congresses. Royce has mounted a challenge to ranking member Spencer Bachus (R-Ala.) for chairmanship of the Financial Services Committee. Current Committee Chairman Barney Frank (D-Mass.) said Congress would see a "major push" on optional federal charter legislation in the next session, no matter which party was in the majority, as the OFC debate does not fall neatly along party lines.

Rep. Royce does not just want an OFC, he wants the federal government to take over insurance regulation from the states. "As I have said all along, the current regulatory structure is not working. We have 51 different regulators, 51 different sets of rules, and 51 different markets, many of which are stymied by bureaucratic red tape."

What It Means to Agents: It is somewhat unusual to see some Republicans - who say they are adamant about the need to reduce the size of the federal government - advocating in favor of a federal takeover of insurance regulation from the states. However, the arrival of a large contingent of Tea Party-sponsored candidates in the House could put a damper on this.

"One of the messages conveyed by voters was a desire to reduce regulation at the federal level," said PIA National President Fred Thomas after the election. "We believe that this election bodes well for PIA's long-standing opposition to a takeover by the federal government of insurance regulation from the states, as some have proposed. Lawmakers elected on a strong platform of opposing federal encroachment will have a hard time supporting proposals for more expansive federal regulation through optional federal insurance charters."