Allstate Chairman Calls For Federal Charter

Allstate Chairman and CEO Tom Wilson today called for a federal charter for insurance in a speech before the Capital Markets Summit held by the U.S. Chamber of Commerce in Washington.

“[The federal charter] would allow strong consumer protections and uniform regulation across states that would lower administrative costs and improve access to new and innovative products,” said the chief executive officer for the Northbrook, Ill.-based insurer.

“The United States has the most sophisticated capital markets in the world, with the most competitive and innovative financial instruments. Yet our system for regulating them is a Depression-era hodgepodge. We need real regulatory reform, better oversight and greater transparency,” he said.

Federal regulation of insurance should take place within the context of creating a comprehensive regulatory framework, which ensures “that middle-income consumers can create more secure economic futures and better manage the financial risks that are a part of everyday life.”

He explained that the U.S. financial services sector “has the potential to become a real agent for change.”

He went on say that “as leaders, we have to do more than just talk about restoring confidence. We must re-examine the way risk is shared between government, business and the American people.”

Earlier this week, the National Association of Insurance Commissioners disclosed on its Web site that state regulators gave Allstate $1.38 billion in accounting relief.

That occurred after Allstate, the nation's largest publicly traded personal lines insurer, posted its biggest loss as a publicly traded company last year.

The accounting change was designed to boost the capital and surplus of Allstate's life insurance unit to $3.25 billion as of year-end 2008 by allowing the company to value assets backed by annuities at book instead of market value, according to data posted on the NAIC's Web site. Most of the relief was granted by the Illinois Insurance Department.

Allstate was accorded the largest accounting relief among life insurers, the NAIC said.