NU Online News Service, Jan. 12, 10:10 a.m. EST

WASHINGTON—Insurance agents who support creation of a federal charter for insurance lashed out at the National Conference of Insurance Legislators (NCOIL) for being misleading when it told members of Congress that premium taxes would be lost if a federal insurance charter is created.

In a statement, Agents for Change, a trade group for pro-optional federal charter (OFC) agents, said that legislation introduced in the last three sessions of Congress "clearly specifies" that states will continue to collect premium taxes under an OFC.

The NCOIL letter to Congress Jan. 5 said that creation of a federal charter "could ultimately cost states $16 billion in annual revenue."

But in the statement issued earlier today, Peter Ludgin, executive director of Agents for Change, said, "NCOIL should acknowledge that premium taxes will not be diminished under an OFC."

Moreover, he said, "state insurance legislators should act in the best interest of their constituents by supporting open markets, choice and competition in the insurance marketplace. They should not use their false fear of revenue loss to cloak their trepidation of losing sole control of regulatory oversight."

The Jan. 5 NCOIL letter was signed by Rep. George Keiser, R-N.D., NCOIL president. It said state lawmakers are concerned that important "funds and jobs could be lost if the Congress authorizes a federal insurance charter and creates a new bureaucracy to regulate insurance."

In his statement, Mr. Ludgin cited a provision in the legislation introduced in the House in the last Congress which specifically states that a national insurer and a national insurance agency "shall not be exempt from any State tax or subject to a lesser burden of any State tax, solely by reason of its status as a national insurer under this Act."

In the 111th Congress, the legislation was the National Insurance Consumer Protection Act, H.R. 1880.

Mr. Ludgin said, "Proponents and opponents of an OFC have very real policy differences."

However, he added, "what cannot be disputed is that the current mandatory state-based system acts as a barrier to entry, limits portability and implements price controls. In the 21st century, producers and insurers should have the choice to opt into a strong federal regulatory system if it benefits their customers."

Special Reports /

Pro-OFC Agent Group Says NCOIL Letter To Congress Inaccurate

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