Senators Propose Federal Insurance Charter
April 5, 2006
WASHINGTON (AFX) -- Life and property-casualty insurers may choose to be regulated under a national insurance charter in a Senate bill introduced Wednesday.
Authored by Sens. John Sununu, R-N.H., and Tim Johnson, D-S.D., the bill would set up a new Treasury Department office to oversee insurance nationwide.
Insurance is currently regulated by the states. The senators said a national insurance charter would allow companies to get new products to consumers faster.
Calls for a national regulator to replace the state-based system often emerge after scandals in the industry. Last year, Marsh & McLennan, the largest U.S. property and casualty insurer, reached an $850 million settlement with New York Attorney General Eliot Spitzer over bid-rigging, price-fixing and hidden-commission allegations.
The American Insurance Association, a property-casualty trade group, is backing the bill.
'It would create a healthy insurance environment that fosters increased competition and product innovation,' said AIA president Marc Racicot.
Big insurance companies have been pushing a federal regulator for months.
Another trade group, the National Association of Professional Insurance Agents, said a federal charter would distract focus from modernizing the current state-led insurance regulation system.
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