Insurance companies could get federal oversight through an optional federal charter, instead of or possibly in addition to state-level regulations, as Congress prepares to hold hearings on financial oversight.
Barney Frank, the chairman of the House financial services committee, said earlier this week that he plans to hold hearings on an optional federal charter, which some insurance companies have long-sought as a way to level the state insurance regulatory framework.
Frank said he will introduce legislation that may include federal oversight of the insurance industry, according to Reuters.
An optional federal charter is mostly opposed by state regulators and consumer groups who argue it would provide less rate protection for purchasers of auto insurance and other insurance policies.
The Insurance Information Institute (III), a group representing the industry, has said some indurers find state regulations overly burdensome.
Some of the nation's largest insurers complain about the difficulties of complying with dozens of state regulatory agencies, according to III.
The industry has sought federal regulation, arguing state rules make it more costly for insurers to develop products and for U.S. insurers operating abroad and for foreign insurers in the U.S.
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Posted: May 01, 2009
