Washington–The chances that Congress will ultimately provide anoptional federal charter for life insurance companies arebrightening, the head of the industry's top trade group saidtoday.

In comments here at the American Council of Life Insurers'annual conference, Frank Keating, ACLI president and chiefexecutive officer, said regarding the optional federal charter thatthe issue is "not whether there will be an OFC for life, but when…"

The trade group's top lobbyist, Kimberly Olson Dorgan,elaborated on Mr. Keating's remarks later. Ms. Dorgan is seniorvice president, federal relations, for the ACLI.

She explained that his optimism stems from determinations bymembers of Congress that the financial services industry must belooked at as one entity, but that in drafting legislation coveringthe entire industry, it is difficult to impose standards thatinclude the insurance industry because that industry ispredominately state regulated.

That means that under the current system, Ms. Dorgan said,Congress has no way of enforcing any standards it seeks to imposeon insurance companies as part of the financial services systembecause there is no enforcement mechanism.

Specifically, Ms. Dorgan said, that deals with such issues asdata security. Another issue that is of apparent growing interestto Congress deals with life insurance underwriting standards.

One proposed measure in Congress of increasing concern to theinsurance industry is a bill sponsored by Rep. Debbie WassermanSchultz, D-Fla., H.R. 3639, which would bar an insurer from denyinglife insurance or establishing higher rates based on "the intent ofsuch person to engage in future lawful foreign travel."

In comments during a panel discussion at the meeting on Sunday,Jim Poolman, North Dakota insurance commissioner, voiced concernthat such legislation is gaining support in Congress.

Mr. Poolman said the National Association of InsuranceCommissioners had established a group to look into the issue.

The bill was introduced by Ms. Wasserman Schultz in late Julyand is now under consideration in the House Financial ServicesCommittee. It would establish federal enforcement standards if aninsurer denied coverage based on disclosure by an applicant forinsurance of future foreign travel plans.

In his comments, Mr. Keating said that it is likely thatlegislation calling for an OFC will be introduced in the Senate "bythe end of the year."

Sens. John Sununu, R-N.H., and Tim Johnson, D-S.D. "haveexpressed interest" in introducing such a bill, Ms. Dorganexplained later. It was learned later the Senate measure wouldapply to both life and property-casualty insurers.

In the House, Reps. Ed Royce, R-Calif., and Paul Kanjorski,D-Pa., both members of the House Financial Services Committee, arelikely to introduce the bill, Ms. Dorgan said.

Meanwhile, Mr. Keating commented that Congress' proposedinsurance regulatory reform measure, the State Modernization andRegulatory Transparency Act (SMART), is "on the rocks" and the bill"does nothing for us…"

The SMART legislation is being drafted by the majority staff ofthe House Financial Services Committee and its provisions wouldestablish standards for state regulators to attain in establishingrules and laws for the insurance industry.

Ms. Dorgan explained later that Mr. Keating said the bill "doesnothing for us" because the Republican leadership of the Housepanel appears to be moving toward focusing on property-casualtyissues in SMART, whose introduction has been continually delayedsince a draft was leaked in July 2004.

"It is clear to us that the life section is not something thatRep. Mike Oxley, R-Ohio, chairman of the committee, is focused onat this time," Ms. Dorgan explained later.

But, Ms. Dorgan said, uniform producer licensing standards, ofmajor interest to ACLI members, continue to be a major focus of thedrafters of SMART.

In general, however, Ms. Dorgan said, congressional interest inan OFC for life stems from the fact that "there is a growingrealization that the marketplace has changed dramatically since theMcCarran-Ferguson Act was passed in 1945."