State regulators cautioned against making "unjustified changes" in insurer oversight that might "essentially result in deregulation" after a General Accountability Office report suggested that Congress look into the pros and cons of creating an optional federal charter.
GAO's study was highly critical of the current financial services regulatory structure. The agency said reform proposals should focus on regulator accountability and cover all activities that pose risks. Its report outlined a framework to provide increased oversight and revise a "fragmented and complex" regulatory system for financial services.
Reacting to prodding from the American Council of Life Insurers, which criticized an earlier draft for failing to discuss insurance reform, the GAO report noted that "harmonizing insurance regulation across states has been difficult."
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