Whether or not the recent crisis at American International Group and the fear of a meltdown in the U.S. financial services system proves the need for Washington to regulate the insurance industry--or exactly the opposite--depends on whether you're for or against an optional federal charter, a debate between leaders of an insurer group and state lawmaker association revealed.
"The recent turmoil in our economy highlights a number of flaws in financial services regulation, including insurance," according to American Insurance Association President Marc Racicot, whose group strongly supports an OFC.
But George Keiser, a Republican representative in the North Dakota legislature, and secretary of the National Conference of Insurance Legislators, begged to differ, suggesting that the recent troubles on Wall Street--even those involving AIG, an insurer--demonstrates that Washington shouldn't be trusted to impose a "one-size-fits-all" regulatory system on the industry.
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