WASHINGTON - While unanimous in their belief that the system of state-by-state regulation of insurance needs fixing, industry witnesses testifying before a House Financial Services subcommittee Thursday stopped short of demanding the introduction of an optional federal insurance charter.

But as the industry feels pressure from new competitors, its representatives say, it is hindered by the patchwork regulatory system that banks and securities firms do not face.

"The ability of our competitors in other industries to introduce new products nationally in a very short timeframe and to have any requisite regulatory approvals handled just once rather than 50-plus times are now critical considerations for life insurance companies," said William B. Fisher, vice president and associate general counsel for Massachusetts Mutual Life Insurance Co., speaking on behalf of the American Council of Life Insurers.

"We have never really undertaken a comprehensive review of the framework of regulation established after World War II," Philip R. O'Connor, a financial services consultant, told the capital markets, insurance and government-sponsored enterprises subcommittee.

But while the National Association of Insurance Commissioners has often been the industry's whipping boy, witnesses took it easy on the group during Thursday's hearing.

"Holding the National Association of Insurance Commissioners solely accountable for enacting insurance regulatory reforms is not a realistic expectation," said James A. Blum, chairman and president of Brotherhood Mutual Insurance Co., speaking on behalf of the National Association of Mutual Insurance Companies.

He went on to say that state legislatures need to be held accountable as well.

"To borrow an old saying, 'the NAIC proposes but the legislature disposes," Mr. Blum said.

While one prominent group, the life insurers council, has floated a proposal for a national charter for life insurance companies, members of the industry have been reluctant to support it. The ACLI has not even said that it will definitely pursue such a proposal.

Rep. Richard H. Baker, R-La., who is the subcommittee chairman, asked the NAIC what Congress can do to help it simplify the regulatory process.

"Do we need to contemplate more drastic measures?" he asked.

J. Lee Covington 2d, director of insurance for Ohio, responded, "You gave us a mandate and a timeframe, now let us do it," referring to a provision of the Gramm-Leach-Bliley Act that required state regulators to set up by 2002 a program to expedite approval of new applications.

But Congress does not seem in a hurry to supercede the states.

Asked recently about the issue of a federal charter, Financial Services Committee Chairman Michael G. Oxley, R-Ohio, said: "Something big is going to come, but it's not going to come very soon. It would be a real stretch to think this Congress would adopt a change in the current structure."

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