Insurance Groups Ask Governors To Back Federal Charter Bill

Leaders of the NGA and the NCSL said the OFC bill would create "a massive new federal bureaucracy in Washington" and permit insurance companies to opt out of comprehensive state oversight.

Keating and Racicot are asking the NGA to take another look at the OFC concept.

"The success of the insurance industry, a major revenue producer for state governments, depends on the existence of a modern and efficient regulatory system that reacts quickly to rapid changes in the marketplace and provides efficiencies and convenience to customers," Keating and Racicot write.

States have made some progress at streamlining insurance regulation, but that progress has come about too slowly, Keating and Racicot contend.

Creating an optional federal charter would "encourage states to achieve long-delayed uniformity and thus make state charters an attractive alternative to a federal charter," Keating and Racicot predict.