Washington--A large number of financial services companies, including AIG, Allstate, Allianz and Chubb, are signing up to support legislation that would create an optional federal charter.

The group is led by the American Bankers Insurance Association. It is meeting with financial services companies throughout the country to seek support for a letter they plan to send to the leadership of the Senate Banking Committee.

Other members include the American Insurance Association, the Council of Insurance Agents and Brokers, the American Council of Life Insurers, and the Financial Services Roundtable.

The letter they are signing would be sent to the leadership of the Senate Banking Committee, however, not the House Financial Services Committee, even though the House panel is much farther along in dealing with insurance regulation modernization legislation than is the Senate panel.

In fact, the House panel's staffers and leadership are meeting with a number of different groups to solicit their views on the shape of financial services legislation.

Introduction of legislation that would create federal standards for state insurance regulation, a moderate step in federal involvement, is expected in July. Action within the committee on such legislation is now expected in the fall, according to insurance industry lobbyists.

The signatories for the letter to be sent to the leadership of the Senate panel are being solicited by a group known as the Optional Federal Charter Coalition. Its latest initiatives include creating a group of life insurance agents who are voicing support for a federal charter, as well as soliciting signatures from financial services companies and state banking associations.

A copy of the letter, obtained by National Underwriter, is dated June 3. It would be sent to Sens. Richard Shelby, R-Ala., and Paul Sarbanes, D-Md., chairman and ranking minority member of the committee, according to the letter.

Kevin McKechnie, director of government relations for the ABIA and its associate director, confirmed that companies are being asked to sign the letter. But, he noted, "It hasn't gone, and it may not go." He added that it is "one of our ideas in draft form."

The letter says that, "Consumers, and the insurers and insurance agents that serve them, need a modern insurance regulatory system that provides a greater product choice and portability, takes into consideration the demands of both the national and regional insurance marketplaces, and creates a national insurance regulator in Washington to address the growing list of national and international issues facing our industry."

The letter adds, "Accordingly, we are writing to urge you to study the problems with the current state-based regulatory system and to consider an Optional Federal Charter as an appropriate solution."

The two-page letter says, "Establishing an Optional Federal Charter would not supplant state regulation; it would simply provide an alternative to it."

Other signers of the letter include the Prudential, Northwestern Mutual and New York Life.

The list includes Aegon, Axa, Assurant, Bankers Fidelity Life, Citigroup, Golden Rule, Great-Western Life, Lincoln, Manulife Financial, and its U.S. subsidiary, John Hancock, Phoenix Life, The Principal, National Life insurance co., OMNIA Ltd. (Bermuda), Pacific Life, Protective Life, Reliance Standard Life, S&T Insurance Group and Securian.

Other marquee financial services firms that signed on to the letter so far include American Express, Bank of America, BB&T, Citigroup, Comerica, HSBC NA, Hibernia National Bank, J.P. Morgan Chase, Keycorp, MBNA and Mellon Financial.

Special Reports /

Group Supports Optional Fed Charter Leg.

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