P-C Groups Cheer Governors' OFC Opposition

WASHINGTON--Three property-casualty insurance agents' groups are lauding the National Governors Association for continuing opposition to legislation creating optional federal chartering of insurers.

The governors have kept their stance in the face of what the Independent Insurance Agents & Brokers of America termed "well-funded" support for federal legislation creating an optional federal charter.

Agent groups' letters to the National Governors Association were prompted by a letter last month from the American Insurance Association and the American Council of Life Insurers to the NGA urging the governors' organization to reverse its position and support legislation creating an OFC.

In its letter, the IIABA lauded the NGA for its support.

"Your unequivocal commitment to the state system and opposition to proposals for the creation of a federal insurance regulator are welcomed by our broad membership, by many others within the industry and, most importantly, by insurance consumers," said Robert Rusbuldt, IIABA chief executive officer.

"Despite the long success of state insurance regulation, the system is once again under attack from opponents who would like to establish an unprecedented and untested federal insurance bureaucracy," Mr. Rusbuldt said. "Legislation creating such an entity has once again been introduced in Congress, and the well-funded proponents of this concept are aggressively pursuing its adoption."

The Minnesota Independent Insurance Agents and Brokers (MIIAB) sent a similar letter, because the current president of the NGA is Tim Pawlenty, governor of that state.

"Establishing a federal insurance regulator would threaten the continued viability of state insurance regulation and the important consumer protections currently in place here in Minnesota, and we thank the NGA and other organizations of state officials for your continued opposition to such ideas and your leadership in this arena," wrote Dan Riley, state executive from the MIIAB.

"The MIIAB joins you in your forceful and principled opposition to these ill-conceived proposals," Mr. Riley added.

And, on Aug. 31, Donna Pile, president of the National Association of Professional Insurance Agents, also sent Gov. Pawlenty a letter voicing opposition to an OFC.

"We join you in opposition to the federal regulation of insurance," Ms. Pile said. "We agree with your assessment of the pitfalls associated with a federal insurance regulator as you presented them" in the joint statement with the National Conference of State Legislatures, she added.

"The federal oversight called for by the National Insurance Act would create confusing legal questions as to who really regulates the insurance industry, thus directly undermining and interfering with the states' right and obligation to regulate the business of insurance," Ms. Pile said.

"The bill would stifle open competition by insurers and exclude small to midsize insurers from the market by creating an atmosphere that favors large national and international corporations, which would inevitably result in fewer choices for consumers," she concluded.