Federal Reserve Board Chairman Ben Bernanke offered support Wednesday for creating an optional federal charter for insurers that would give the companies an alternative to a patchwork of state regulations.
"It would be a useful idea to create a federal option for insurance companies, especially for large, systemically critical insurance companies," he said in his second congressional appearance this week.
The American Bankers Insurance Association praised Mr. Bernanke's comments.
"This long overdue measure would create greater efficiency and modernization for the insurance regulatory system," Kevin McKechnie, the executive director of the association, said in a press release.
The idea of an optional charter has bounced around Congress for years and a report from the Government Accountability Office released in January found that such a measure would make insurance regulation more efficient.
Appearing before the House Financial Services Committee, Mr. Bernanke also took the opportunity to point out that while the largest banks in the country are suffering, smaller institutions remain strong.