WASHINGTON – Lawmakers began hearings yesterday on one part of the Treasury Department’s new "Blueprint" for regulatory reform, the proposal for a national charter and regulator for insurance companies.
A representative for CUNA Mutual Group endorsed the concept of a national charter, which has been kicking around Congress for a decades, saying uniform national standards would save both it and its policyholders significant money and be much simpler than the current state-by-state system of regulation.
Congressman Paul Kanjorski, chairman of the House Financial Services Subcommittee on Capital Markets and Insurance, said he is introducing a bill today that will create a federal regulatory structure to be overseen by the Treasury Department. Such an a national office, noted the Pennsylvania Democrat, is one of the major provisions of the recently introduced Treasury Blueprint. "The status quo of state insurance regulation does not work," said Kanjorski during yesterday’s hearing. "We must move swiftly, but we also must be smart about it."
Kanjorski endorsement of a federal scheme for insurance was matched by Deborah Pryce, the senior Republican on the committee, indicating bipartisan support for the initiative.
Congress has passed legislation several times, most significantly the 1945 McCarran-Ferguson Act, which sets out a state-by-state system of insurance regulation. But more recently, a consolidation in the insurance industry, creating huge multi-line providers, has prompted the industry to support a national oversight scheme.
The national insurance regulation has the best chance of being approved among the numerous provisions in the Treasury plan because it is alreday in motion.
On the other hand, a proposal to combine NCUA with the FDIC, which is adamantly opposed by the credit union lobby, has very little chance of being enacted.
