Federal Regulator For Insurance Firms? Barney Frank says Yes

House Financial Services Committee Chairman Barney Frank, D-Mass., gave insurance lobbying groups something to argue about yesterday. In a press conference about financial regulatory reform, Frank said he wants lawmakers to create an optional federal charter (OFC) for insurance companies. Such an OFC would allow all insurance companies to opt to be regulated by a federal authority—creating an SEC-like overseer for insurance firms. Currently, insurance companies are regulated by individual state regulators in the states where they operate.

In general, large insurance firms prefer federal charters while smaller ones prefer the current state-regulated system. For larger companies, a federal regulator would create more uniformity in the rules, making compliance easier and less costly, says Jack Dolan, a spokesperson for the ACLI. But smaller companies complain that having both a federal and state system would cause too much confusion for customers. A federal system might also be less strict, putting the smaller companies at a regulatory disadvantage...

Registered Rep: Federal Regulator For Insurance Firms? Barney Frank says Yes