Posted On: November 1, 2007, 3:49 pm CDT

Posted By: Observer

I actually favor Optional Federal Chartering similar to the dual regulatory system for banks. Companies opt for one or the other, but are only subject to regulation by either the States or the Federal Regulator, but never both. State Departments of Insurance could continue to regulate state licensed insurers and agents. The State DOI's would only go away if state licensed insurers and agents did (which would ultimately be a consumer decision).

I will respectfully disagree with your estimate of the cost of a Federal Regulator. With the ability to centralize and eliminate duplication on issues such as licensing, insolvency funds, and other common items, I think a Federal regulator can be much more cost effective, but more importantly, move more quickly than 50 state regulators who are beholden to 50 state legislatures.

Lastly, regarding regulation of rates, I would hope a Federal Regulator would have the sense to avoid any regulation of rates in markets/coverages where competition is adequate to prevent anti-competitive behavior. Such actions only restrict availability and deter entry by new competitors.