WASHINGTON--The Bush administration rocked the insurance world this weekend by preparing to formally endorse optional federal charters for insurance companies and producers this Monday. Insurance industry reaction was split along the usual fault lines, depending on whether a particular association's membership supports or opposes the controversial concept.
Support for an OFC is expected to be announced March 31, when Treasury Secretary Henry Paulson unveils the agency's proposal to overhaul the entire federal regulatory structure for financial services.
Treasury's plan--calling for separate property-casualty and life-disability charters--also includes a proposal to create an interim federal insurance regulator within Treasury to coordinate with state regulatory officials on "pressing" insurance regulatory issues, an acknowledgment that the OFC debate in Congress is likely to be "difficult and ongoing," the department noted.
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