A report by Fitch Ratings said that federal regulation of the insurance industry is probably inevitable, but that regulation would not necessarily bring benefits quickly to both the industry and consumers.
"Fitch believes increased federal regulation of the insurance industry is inevitable in the long term," the report said. Strong opposition by several influential insurance associations, election-year politics and divisiveness in Washington would prevent passage of any federal proposals in the short term, the report added.
A single regulator would conceivably benefit life and annuities markets the most and help reduce or eliminate redundancies and inefficiencies caused by state regulations. Passage of an optional federal charter, however, could have the effect of causing insurers "overlapping and confusing state and federal requirements."
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