Lawmakers met yesterday to discuss the possibility of allowing insurance companies to have the option to be regulated by the federal government as opposed to the current system of state regulation, according to the Washington Post.
The issue continues to be a divided one among the insurers, some of whom were present at the meeting in support of federal regulationthey told a House Financial Services committee that larger, national companies would likely benefit from a standardized set of regulations.
Those in opposition argued that insurance is an exceptionally local product that would be best served by regional oversight.
The Post noted that much of the support in favor of federal regulation comes from the life insurance sector.
Two bills have been introduced to create a new federal regulatory system, but both are lacking support to move forward.
One bill, introduced by Sen. Charles E. Schumer (D-N.Y.), models the banking industry’s’ dual state-federal regulatory system, giving insurance companies the option to choose between state and federal regulation. The other, introduced by Rep. John J. LaFalce (D-N.Y.), proposes the creation of an optional federal charter for insurance companies, but keeps agents and brokers under state regulation.
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