Rep. Frank: House Panel to Examine Federal Regulation Option for Insurance

By Rachelle Younglai | April 28, 2009

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A congressional panel will examine whether an optional federal charter for insurance companies is needed, the chairman of the U.S. House Financial Services Committee said Tuesday.

The committee’s panel on insurance and capital markets is launching a series of hearings on an optional federal charter, Democratic Representative Barney Frank told the Reuters Global Financial Regulation Summit in Washington.

Frank, who plans to introduce a broad bill to reform U.S. financial regulation, said “there may well be an insurance component” to it.

U.S. insurance companies are now largely policed by the states and some lawmakers support legislation to create a federal regulator that could smooth the patchwork of regulation.

Similar attempts have failed to pass Congress in the past, partly due to opposition from states and consumer groups who say it would lead to higher insurance rates and weaken consumer protection.

But now that the federal government has spent billions of dollars in taxpayer funds to prop up big insurer American International Group, calls for a federal regulator have intensified.

Frank said that whether or not insurance oversight is federalized, his proposal to create a “systemic risk regulator” — which would monitor all risk in the U.S. financial system — would have a mandate that would cover large insurance companies.

(Reporting by Kevin Drawbaugh and Rachelle Younglai; Editing by Tim Dobbyn)

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Latest Comments

  • May 1, 2009 at 11:56 am
    thylvethter says:
    Thith ith an outrage! Thome of you crybabieth need to thtop and lithen to me. I'm Barney Fwank, and I'm thure my wepubwican caweegs in the congreth agree with me! The only ... read more
  • April 29, 2009 at 3:39 am
    paul says:
    barney Frank & CHRIS dodd are the fools who should be held responsible for the the Fanny mae & freddie mac failures. Ins companies already have much state regulation any feder... read more
  • April 29, 2009 at 3:36 am
    gooney bird says:
    Look at the congressional lineup in most of New England. Look at the Federal Judges. Look at the decisions that come out of that part of the country. That is the bastion of ... read more
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