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NEWS RELEASE
Sept. 11, 2008
NAIFA JOINS OPTIONAL FEDERAL CHARTER COALITION
WASHINGTON– The Optional Federal Charter Coalition announced the addition of the National Association of Insurance and Financial Advisors to its membership today. The inclusion of NAIFA highlights increasing support for the creation of an optional federal charter for insurance regulation. NAIFA is now the 13th organization to join the growing coalition of financial services associations.
"We are proud and excited to represent our membership as a part of this vital advocacy group,” said Cliff F. Wilson, president of NAIFA. “Our members support the creation of an OFC that includes true agent choice, enhanced consumer protections, the preservation of state regulation and the establishment of a single federal entity with expertise in insurance matters.”
Sens. Tim Johnson (D-SD) and John Sununu (R-NH), as well as Reps. Melissa Bean (D-SD) and Ed Royce (R-CA), introduced legislation in 2007 to reform insurance regulation through the creation of an optional federal insurance charter. Under the legislation, insurance companies and agents could choose to be regulated at the national level under a new federal charter providing this alternative stands to reduce the consumer costs and improve the delivery of insurance products among other things.
In March, Treasury Secretary Henry Paulson recommended the creation of an OFC as part of the department’s Regulatory Blueprint of Financial Regulation. Treasury’s recommendation followed the reports of U.S. Senator Charles Schumer (D-NY) and New York Mayor Michael Bloomberg and the U.S. Chamber’s Capital Markets Commission that separately called for an OFC as an important part of improving competitiveness in the financial services industry.
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 and services 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 in desperate need of reform. An optional federal charter would allow insurers, reinsurers, insurance agencies and insurance producers to conduct business under one set of strong, national rules, which ultimately benefits consumers in ways that exceed the current structural abilities of the state regulatory system.
Founded in 1890 as the National Association of Life Underwriters, the National Association of Insurance and Financial Advisors comprises nearly 800 state and local associations representing the business interests of 60,000 members nationwide. Members focus their practices on one or more of the following: life insurance and annuities, health insurance and employee benefits, multiline, and financial advising and investments. NAIFA’s mission is to advocate for a positive legislative and regulatory environment, enhance business and professional skills, and promote the ethical conduct of its members. Visit NAIFA’s website at www.naifa.org.
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. For more information on the OFCC please visit our Web site at www.OFCcoalition.com.
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Media Contacts:
Agents for Change: Peter Ludgin, 202-589-1929, peter@agents4change.net
ABA/ABIA: Jonathan Snowling, 202-663-5468, jsnowlin@aba.com
ACLI: Jack Dolan, 202-624-2418, jackdolan@acli.com
AIA: Dennis Kelly, 202-828-7494, dkelly@aiadc.org
FSR: Gina Maffei, 202-589-2427, Ginam@fsround.org
NAILBA: Alex DelPizzo, 202-589-0800, adp@wswdc.com
RAA: Sandy LaFevre, 202-783-8313, lafevre@reinsurance.org
NAIFA: Lee Allen, 703-770-8112, leeallen@naifa.org
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