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NEWS RELEASE 2008
ABA/ABIA Media Contact: Jonathan Snowling
(202) 663-5468
E-mail: jsnowlin@aba.com
Agents for Change Contact: Peter Ludgin
(202) 589-1929 or E-mail: peter@agents4change.net
ACLI Contact: Jack Dolan
(202) 624-2418 or E-mail: jackdolan@acli.com
AIA Contact: Dennis Kelly
(202) 828-7494 or E-mail: dkelly@aiadc.org
FSR Contact: Keosha Burns
(202) 589-2427 or E-mail: keosha@fsround.org
NAILBA Contact: Alex DelPizzo
(202) 589-0800 or E-mail: adp@wswdc.com
THE OPTIONAL FEDERAL CHARTER COALITION APPLAUDS TREASURY RECOMMENDATION OF "OFC" IN BLUEPRINT
WASHINGTON, March 31 – The Optional Federal Charter Coalition commended Treasury Secretary Henry Paulson's recommendation to create an optional federal charter for insurance as outlined by the Department of Treasury's Regulatory Blueprint of Financial Regulation. Establishing an optional national insurance charter would increase benefits to consumers, enhance the global competitiveness of the American insurance industry, and bring greater uniformity and effectiveness to the regulatory process.
"The OFC initiative took a dramatic leap forward today," said Frank Keating, president and chief executive officer of the American Council of Life Insurers. "Efficiencies resulting from a national, streamlined regulatory structure will lead to an improved availability of innovative financial and retirement security products."
"The inclusion of an OFC for insurance, as outlined in the Treasury blueprint, is a major milestone in that it recognizes the important role that the insurance industry now plays in this new financial world of integrated and interconnected markets," said Marc Racicot, president of the American Insurance Association (AIA).
"Today's unveiling of The Blueprint for Financial Regulatory Reform is a very important marker in the sand and we laud Secretary Paulson for his vision and leadership," said Robert Poli, chairman of Agents for Change.
"The logic of an Optional Federal Charter is compelling, and the value of it has been documented by our dual-banking system," said Wayne Abernathy executive director for financial institutions and regulatory affairs at the American Bankers Association, who is also a former assistant treasury secretary. "What this measure has really lacked in the past was the strong backing of the executive branch, so today's endorsement provides a major contribution to the rising tide of support for an OFC."
"Secretary Paulson has thrown down the marker calling for a national discussion that recognizes the urgency and value of this much needed reform," said Kevin McKechnie executive director of American Bankers Insurance Association. "This long overdue measure would create greater efficiency and modernization for the insurance regulatory system."
Under current law, insurance providers must follow differing—sometimes conflicting—regulations in each state in which they operate. Insurers face obstacles such as inconsistent regulations, barriers to innovation, conflicting agent licensing and education requirements, among others. All of these factors drive up the price of products and slow down innovation and delivery of new products to consumers.
Members of the OFCC support the creation of a system that would give insurers and producers the option of obtaining a federal charter in lieu of the current state-by-state system of licensing and regulation. Today's global insurance industry is governed by 56 separate regulatory regimes and is the only sector of the financial services industry whose regulatory system has not been modernized. An optional federal charter would allow insurers, reinsures, insurance agencies and insurance producers to take advantage of the regulatory flexibility banks have long enjoyed – the option of doing business under one set of national rules, which ultimately benefits consumers in ways that exceed the current structural abilities of the state regulatory system. For more information on the OFCC please visit our Web site at www.OFCcoalition.com.
The OFCC represents the largest and most diverse group to push for a modernized insurance regulatory system. Trade group members include Agents for Change, American Bankers Association, American Bankers Insurance Association, American Council of Life Insurers, American Insurance Association, The Council of Insurance Agents and Brokers, The Financial Services Forum, The Financial Services Roundtable, the Life Insurers Council, the National Association of Independent Life Brokerage Agencies and the Reinsurance Association of America.
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