WASHINGTON–A nonprofit conservative think tank is voicing support for a measure to establish an optional federal regulator for property and casualty insurers.
"The current system of state-by-state, patchwork regulation increases average insurance rates and reduces economic efficacy," wrote Eli Lehrer with the Washington-based Competitive Enterprise Institute.
In his recent essay published by The National Review, Mr. Lehrer, a senior fellow with CEI, wrote, "Eventually, insurance will work best if the United States sweeps away nearly all rate regulation and lets the market set the insurance rates for people's homes and cars."
Mr. Lehrer specifically mentioned legislation introduced in the last Congress, and expected to be reintroduced this year, by Sen. John Sununu, R-N.H., and Sen. Tim Johnson, D-S.D., that would establish a federal insurance regulator.
Such a proposal, he said, could help improve the insurance system for companies and consumers, but he added that the specifics of the plan would ultimately determine whether a federal insurance regulatory scheme would be a help or a hindrance.
"The Sununu-Johnson plan could improve competition, increase risk pooling and make things better for consumers," he said. "But if it's a poorly structured plan, it could subject insurance companies to both federal and state regulation. That would make things worse."
CEI describes itself as a pro-market, public policy group committed to advancing the principles of free enterprise.
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