State Farm, USAA Back Paulson OFC Scheme

WASHINGTON--Personal lines property-casualty insurers USAA and State Farm both said this week that they supported the optional federal insurance charter concept embodied in the Treasury Department's new financial services regulation blueprint.

In a statement, State Farm "commended" Treasury Secretary Henry Paulson's call for an OFC.

Ed Rust Jr., chairman and CEO of State Farm, added, "The current regulatory structures make serving insurance customers across the country complicated, costly and cumbersome. Increasingly, insurance challenges are also national and international in scope."

In the 21st century, he said, "we should be able to do better for our customers. That is why we applaud Secretary Paulson's call for an optional federal charter."

USAA "praised" the Treasury's call for an OFC.

"We commend Treasury Secretary Paulson for recognizing that insurance modernization is long overdue. Solutions like an optional federal charter will provide consumers with more choice, cost savings, and consistent consumer protections and efficiency," said Brian Conklin, vice president of federal government relations for USAA.

"U.S. military members are disproportionately penalized by the current system because one third of all military members move every year pursuant to federal order. As a result, military members must frequently navigate a new insurance system," Mr. Conklin said.

"This can be confusing, time-consuming and inefficient," said Mr. Conklin. "A single regulator will simplify the insurance process and allow our members to focus on their principal duties of protecting and serving our country."