WASHINGTON–An aide to a key House member said his boss is considering drafting optional federal charter legislation for insurers that would mandate they offer consumers an “all perils” policy.

Todd Harper, a legislative assistant to Rep. Paul Kanjorski, D-Penn., said that the concept of an optional federal charter for insurers “is an idea that is increasingly gaining in attractiveness in Washington.”

However, he added that Mr. Kanjorski, one of the senior Democrats on the Financial Services Committee and the senior Democrat on the key Capital Markets Subcommittee, believes that a give and take is necessary in legislating and that he has pondered the idea of “some kind of requirement for an all perils policy” for companies seeking to be federally regulated.

Mr. Harper, who also serves as a staff member on the Capital Markets Subcommittee, said that members of the Financial Services Committee are relatively comfortable with the idea of dual regulation based on their experiences when the committee handled only banking issues, before it was renamed and given jurisdiction over insurance issues.

Additionally, Mr. Harper said that federal charter solely for life products would be an easier sell politically.

However, he said that Rep. Kanjorski “has become increasingly comfortable” with including property and casualty lines as well and raised the prospect of an optional federal charter measure starting out with a limited scope, perhaps only life products, and then expanding as the federal regulator gained experience and expertise in insurance matters.

As a counter-example, Mr. Harper pointed out that the Department of Homeland Security ran into numerous problems in its early days as it tried to serve as an expert on all areas while breaking the culture of those government agencies it had absorbed.

Mr. Harper spoke at an event in Washington sponsored by the law firm of Wiley, Rein and Fielding along with the University of Connecticut Law School.

At the same event, Rep. Dennis Moore, D-Kans, said that “high on the agenda” for the House Financial Services Committee in the 110th Congress are an extension to the Terrorism Risk Insurance Act program or other long-term solution for terrorism risk, the optional federal charter, and the issue of how to deal with catastrophic risk.

In dealing with the TRIA program, Mr. Harper said that the House would try to act sooner rather than later. “We want to do this right away,” he said. “We don't want to wait until December” of 2007.

Mr. Harper said that lawmakers would consider a number of possibilities, including the proposed insurer pooling concept for terrorism risk.

Although the pool concept was abandoned in the early discussion that led to TRIA out of concerns that the proposed pool wouldn't be sufficiently funded in the short term, Mr. Harper noted that the circumstances would be very different today if had been adopted.

“If we had gone with the pooling method, those pools would be significant today,” he said.

Any look at TRIA, he said, should also include a solution for nuclear, biological, chemical and radiological risks, he added.

On the catastrophe issues, Mr. Harper said that the Financial Services Committee would likely time their actions with the release of reports from the Government Accountability Office that former committee Chairman Mike Oxley, R-Ohio, had requested earlier this year. Those reports, Mr. Harper said, are expected to be released in the late spring and early summer of 2007.

Another issue the committee is likely to take up, Mr. Harper said, is legislation to clarify and simplify the regulation of multistate surplus lines transactions. That legislation was passed by the House this year, but is unlikely to move through the lame duck Senate, which Mr. Harper noted has ignored the bill thus far.

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