Washington

The battle lines are already being drawn in anticipation of a renewed debate in Congress next year over creation of an optional federal charter for insurers.

The first step was the announcement that an optional federal charter will definitely be on the 2011 congressional agenda because it has strong bipartisan support.

That news came from Rep. Barney Frank, D-Mass., who chairs the House Financial Services Committee, during a conference call with state insurance lawmakers at the summer meeting of the National Conference of State Legislators.

That prompted disclosure early last week that a new group has been formed to oppose any type of federal regulation of insurance whatsoever. The group–to be called the States Alliance for Balanced Insurance Regulation (SABIR)–is chaired by Ernst Csiszar, a former state regulator and insurance association leader.

SABIR will represent small-to-midsize insurers in a new group designed to fend off increased federal regulation of the industry, according to David Bass, president and chief executive officer of Raptor Strategies LLC, based in Washington. Mr. Bass will serve as executive director of SABIR, with Rep. Barry Goldwater Jr. as its president.

Mr. Csiszar formerly served as South Carolina's insurance regulator, as well as president of the National Association of Insurance Commissioners. He left his NAIC leadership post midterm in 2005 to take over as CEO of the Property Casualty Insurers Association of America, but resigned abruptly in September 2006 amid reports of policy conflicts with members over PCI's participation with ProtectingAmerica.org–a group pushing for a federal mega-catastrophe fund.

Mr. Csiszar is also a director at the Bridge Strategy Group, a management consulting firm.

In commenting on the optional federal charter issue in a statement, Mr. Csiszar said that "SABIR's founding membership spans the industry, representing providers as well as purchasers of insurance products, including health care."

Mr. Csiszar and Mr. Bass said SABIR were scheduled to host their first event at the NAIC's Seattle meeting, which started this past weekend.

Meanwhile, the National Association of Professional Insurance Agents independently said that it is asking members to lobby their representatives in Congress during this month's congressional recess to be steadfastly opposed to federal regulation of insurance in any form.

"PIA members will remind members of Congress and congressional candidates during August that America's Main Street insurance agents expect them to vote 'no' on the so-called optional federal charter–no excuses and no compromises," PIA President Jon D. Spalding said in a statement.

As for Rep. Frank's pledge to put the optional federal charter proposal back on the front burner next year, the congressional power broker said that as the committee chair, he would remain neutral during the debate–but that he personally saw "no need for federal oversight of auto insurance."

His comments were made available in a summary of his remarks released by the National Conference of Insurance Legislators.

Rep. Frank also said the coming debate was a "not-surprising" follow-up to the massive financial services reform legislation just enacted by Congress–H.R. 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act. He said that in his view, "the bill recognized the importance of state oversight."

Rep. Frank's comments are consistent with prior statements. He has repeatedly said that his experience as a Massachusetts state legislator "taught me long ago the tough realities of regulating auto insurance."

Special Reports /

Optional Federal Charter Debate Put Back On The Front Burner In Congress

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