WASHINGTON--Insurance should be federally regulated and Congressshould create a common database of all financially related fraudenforcement actions, a private fraud investigator who attempted toreveal the Madoff pyramid scheme told a House committee.

Boston-based Harry Markopolos made his comments Wednesday duringtestimony before the Capital Markets Subcommittee of the HouseFinancial Services Committee in which he scored the Securities andExchange Commission for ignoring his repeated warnings the Madofffund operation was a fraud.

In response to questions by committee members, Mr. Markopolossuggested that there should be a "super financial organization withthe departments underneath."

Mr. Markopolos said departments underneath, "like the Securitiesand Exchange Commission," should include a "national insuranceregulator, some bank regulator" and probably the Federal ReserveBoard "to handle all these market functions."

And, he said, they should "have one super regulator above them,so that there's no drop in coordination."

Mr. Markopolos made that comment in response to a question bythe panel's chairman, Rep. Paul Kanjorski, D-Pa.

"If you had your way, what would be your highest recommendedaction by this Congress to take in regard to the regulatory schemein the country right now?" Rep. Kanjorski asked Mr. Markopolos.

A day earlier, Rep. Barney Frank, D-Mass., chairman of the fullcommittee, had designated Rep. Kanjorski to coordinate all activitythe Financial Services Committee undertakes in this Congress inrelation to future regulation of insurance.

Later, in response to a question from Rep. Scott Garrett,R-N.J., ranking minority member of the panel, Mr. Markopolos saidfuture federal regulatory schemes for financial services companiesrequire "a super regulator to supervise all the different[agencies]--and I would minimize the number of subregulators theyhad underneath there."

Mr. Markopolos said, "I want one centralized database of allenforcement actions, so that the banking regulators know what thecapital markets regulators are doing, and also know what theinsurance regulators are doing, because right now, you have theseconglomerate firms that deal with all aspects of finance.

"They have insurance. They do banking. They do securities," hecontinued. "And you need to combine the regulations database, sothat people are aware of all the infractions."

Specifically, Mr. Markopolos said, "You can't afford to be splitinto an army of ants. You need to be as giant as the conglomeratesthat you are regulating."