On April 28, 2009, Democratic Representative Barney Frank, chairman of the U.S. House of Financial Services Committee, told the Reuters Global Financial Regulation Summit in Washington that a congressional panel will examine whether insurance companies should be regulated under an optional federal charter, which would give insurers a choice between state or federal regulation. Rep. Frank plans to introduce a broad bill to reform financial regulation in the United States, which may include an insurance component. Other attempts to adopt an optional federal charter have not passed Congress, due to strong opposition from states and consumer groups that believe federalization of the insurance industry would led to higher insurance rates and weaker consumer protection. According to press reports, Rep. Frank stated that, even if the oversight of insurance is not federalized, he proposes to establish the position of a “systemic risk regulator” to monitor all risk in the U.S. financial system, including among insurance companies.
We will continue to follow the proposal and provide updates on InsureReinsure.com.
