Frank Aide Warns State Legislators Of Fed Reform

WASHINGTON–A top House Financial Services Committee aide told state insurance legislators on Friday that legislation passed in this Congress will create a federal regulator for insurance, “certainly at the systemic risk level, and very probably beyond that.”

Tom Glassic, a counsel to Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, said federal regulation of insurance is unlikely to include an optional federal charter, but “some reform” is likely at the federal level.

He declined to elaborate.

Mr. Glassic made his comments during a briefing on the committee's activities at the spring meeting of the National Conference of Insurance Legislators (NCOIL) held here.

He urged the legislators “to get involved in the process” of a new regulatory scheme for insurance going forward.

He declined to get involved in specifics but mentioned federal regulation of reinsurance as one possibility.

Mr. Glassic implied that he would personally support a strong, continued state role in regulating insurance activities.

“There is no point in not leveraging the current system” in any insurance regulatory scheme going forward, he said, also noting that the states “have a pretty effective consumer protection system.”