United States Senators John Sununu (R-N.H.) and Tim Johnson (D-S.D.) are scheduled to outline their proposal to allow life and property/casualty insurers to choose federal rather than state charters under an “optional federal charter” regulatory system at a press conference at noon today.
The insurance industry has split over the advisability of creating a dual regulatory system with an optional federal charter. The life and financial services industry, some larger property casualty insurers and larger commercial insurance brokers generally favor the option while other property casualty insurers and independent agents oppose it. State insurance commissioners also oppose the Sununu-Johnson approach.
Opponents of a federal charter prefer the approach taken in another bill, the State Modernization and Regulatory Transparency or SMART Act. The SMART Act calls for streamlining state insurance regulation instead of creating a separate federal option.
Sununu and Johnson are both members of the Senate Banking Committee. The committee’s chairman, Sen. Richard Shelby (R-Al.), has said holding a hearing on the insurance regulatory proposals later this year is among his committee’s priorities.
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