WASHINGTON–Momentum is apparently building for both life and property-casualty insurers to have an option to operate under a federal charter within the next two years.
The evidence includes the decision by Rep. Paul Kanjorski, D-Pa., chairman of the Capital Markets Subcommittee of the House Financial Services Committee, to hold a hearing Tuesday on legislation creating an insurance information office within the Treasury Department.
Creating such an office as an interim step toward a federal charter was recommended in the blueprint for financial services modernization unveiled by the Treasury Department in March.
Property-casualty insurance lobbyists in general have voiced support for creating the office.
However, a last-minute glitch has developed because compromise language clarifying the preemptive authority of the office adds two provisions that are giving some in the industry pause.
One provision specifies that the office would obtain its data from the National Association of Insurance Commissioners' office in Kansas City, Mo. The other adds a representative from the Federal Trade Commission as a member of a board to advise the Treasury Secretary on insurance-related issues.
"The bill creates a role for the NAIC that we had not heretofore considered, and we need to evaluate such a proposal very carefully," said Cliston Brown, a spokesman for the Property Casualty Insurers Association of America. "We are in the process of reviewing it very carefully at this time."
The industry's concern with the two provisions deals with conflicts the insurance industry has had with the FTC over credit scoring and market conduct issues. It is also battling with the NAIC over its authority to release market conduct information to the public.
Reflecting the growing concern with the changing momentum, Catherine Weatherford, executive vice president and chief executive officer of the NAIC, sent a memo out on May 28 to insurance commissioners and the Kansas City, Mo., staff of the NAIC saying that she is considering moving her office to Washington, D.C.
She said she is considering the move because "having a stronger presence in Washington, D.C., will enhance the NAIC's availability and access to consumer organizations, the U.S. Congress and industry trade associations."
(To read more on this topic, see the complete story in the June 9 edition of National Underwriter.)
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