Opposition by state legislators to the increasing power of Washington over insurance sales may be stronger in theory than in practice.

That certainly seemed to be the case Friday at the annual meeting of the National Conference of State Legislatures. During a panel pro-vocatively billed as a examination of "eroding" state power, only a single lawmaker spoke up to protest federal regulators' increasing ability to preempt state financial services laws.

By contrast, roughly two dozen other elected officials in the audience sat silent as state regulators, industry lobbyists, and academics warned that the states' power over financial services is steadily fading.

"There are very few state lawmakers who know about the significance of these issues," said Democratic Texas state Rep. David Counts in an interview. "But as a state legislator, I don't want to let our ability to regulate banking and insurance be swallowed up."

Iowa state Sen. Patrick Deluhery, a Democrat who led the discussion, said that beyond the handful sitting on financial services committees, few of his colleagues have been motivated to tackle financial reform.

"Rarely do I get a voter who says, 'You really should pass a bill to reorganize financial markets,'" Sen. Deluhery said.

Rep. Jon Fox, R-Pa., sympathized with the state legislators, saying most elected officials in Washington have shown little interest in stemming the growing power of federal regulators even though Capitol Hill is returning authority to the states in areas such as welfare reform, transportation spending, and environmental laws.

To most lawmakers, Rep. Fox said, the Senate and House banking committees' primary accomplishments are investigating the Whitewater scandal and Swiss banks' dealings with the Nazis during World War II.

"If you ask a typical member of Congress about Glass-Steagall, he would ask which one was arrested and which one the prosecutor," Rep. Fox said, referring to efforts to repeal the Depression-era law separating the banking and securities businesses.

In an attempt to weigh-in on financial reform, the NCSL was expected to approve on Saturday a resolution opposing any preemption of state insurance licensing requirements.

They were also expected to pass a separate measure opposing any preemption of state laws on the placement and operation of automated teller machines.

Earlier in the four-day conference, legislators said their best defense against the federal government's ever-expanding reach is to enact more uniform insurance and securities laws.

Differences in state licensing and consumer protection laws have created an "absolute nightmare" for companies with multistate operations, complained Utah state Rep. Brian R. Allen, a Republican who also works for Zions Bancorp's insurance unit.

During a panel discussion on financial reform legislation, Rep. Allen and other state lawmakers criticized a provision in the bill allowing federal banking regulators to preempt many state laws.

They acknowledged, however, that states have not kept pace with the consolidation in the financial services industry and must eliminate disparities between their laws to help ever-larger companies run more efficiently.

Connecticut Insurance Commissioner George Reider warned that the insurance industry would eventually pressure Congress to enact federal licensing standards if the states fail to adopt uniform rules.

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