Senate Gets Optional Federal Charter Bill

The commissioner would establish by regulation the qualification standards for a federal insurance producer license.

The legislation says that in establishing these standards, the commissioner is "encouraged" to base the regulation on the Model Producer Licensing Act developed by the National Association of Insurance Commissioners, Kansas City, Mo.

The Schumer bill, which at press time lacked a bill number, drew a wide range of reactions from industry groups.

David Winston, vice president of government affairs for the National Association of Insurance and Financial Advisors, Falls Church, Va., says NAIFA policy does not permit support of optional federal chartering.

He adds that he is encouraged by actions taken by the states and the NAIC to achieve greater efficiency and uniformity of regulation.

Winston says continued improvements in state regulation may obviate the interest in optional federal chartering.

The ACLI, which supports optional federal chartering, issued a statement praising the Schumer bill.

"ACLI is pleased that Sen. Schumer has taken the important first step on this journey, which is critical to the continued competitiveness of life insurers in a rapidly evolving financial services marketplace," ACLI says.

Beth Climo, executive director of ABIA, says that in light of the Sept. 11 terrorist attacks, it is now more clear than ever that insurance is a national business and that the federal government needs to expand its understanding of insurance.

The Schumer bill, she adds, will address important deficiencies in the state regulatory system.

The NAIC said in a statement that optional federal chartering is unnecessary.

"Our goal has been?and continues to be?creating a 21st century regulatory system that not only makes it easier for companies to get products to market and gives consumers more choices, but also enhances the protection of the very policyholders we are charged with protecting," NAIC said.