WASHINGTON--A House committee will probably consider optional federal charter legislation for insurers in stages, focusing first on the life sector, the panel chairman said today.

Rep. Barney Frank, D-Mass., who chairs the House Financial Services Committee, said the group will address an OFC for life insurers before dealing with the more controversial issue of an OFC for property-casualty carriers.

Rep. Frank brought up the issue of "bifurcation" on the OFC as he outlined an ambitious agenda for his committee for this year at a press briefing.

Other issues that will be taken up by the panel will include issues related to the need to renew the National Flood Insurance Program. The panel will also separately deal with catastrophic storm issues, he said.

On the NFIP, he said he is working with Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee, to see that a conference committee to resolve differing versions of the legislation be held as soon as possible.

The House and the Senate Banking Committee have passed substantively different versions of legislation renewing and reforming the NFIP. But the Senate bill is being held up from floor action by Louisiana's two senators, who believe the reform provisions contained in the Senate measure will make flood insurance unaffordable for residents of that state.

Mr. Frank said the Capital Markets Subcommittee headed by Rep. Paul Kanjorski, D-Pa., will hold multiple hearings on OFC, and while he used the word "bifurcation" in discussing OFC legislation for life and property-casualty industries, he also said that no final decisions have been made as to how the legislation will be addressed.

Still, Mr. Frank mentioned that every time he talks with foreign regulators on trade matters, they raise the issue of having to deal with every state on insurance matters.

Justin Roth, a senior lobbyist for the National Association of Mutual Insurance Companies, said that Congress is playing a "constructive role" in pointing out both the positives of state regulation and the areas in which states can improve on regulation."

In general, he said, NAMIC "believes that states must continue to reform, but that creating federal regulation will create more bureaucracy, not less."

Dennis Kelly, director, federal media relations for the American Insurance Association, added that the AIA is "encouraged to hear the chairman say there will be more hearings on the issue of an optional federal charter for insurers."

"We were expecting a continuation of the growing energy around the idea of an OFC, and we anticipate these hearings will continue to build on the momentum generated with the introduction in 2007 of bi-partisan bills in both the House and the Senate, as well as the initiation of the Treasury department's modernization blueprint," Mr. Kelly added.

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Rep. Frank Says Life OFC Legislation Will Likely Come First

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