Supporters of regulating the insurance industry at the federal level are lobbying Congress to go beyond President Barack Obamas financial regulatory reform overhaul.
Groups like the American Insurance Association, the Financial Services Roundtable, and the American Council of Life Insurers support the White Houses efforts to create a national insurance infrastructure but are also pushing for the creation of an optional federal charter that would allow insurance companies to choose whether to follow state or federal rules.
Obamas white paper called for the creation of the Office of National Insurance, which would be charged with advising the Treasury Department on issues of international trade and industry solvency.
The White House didnt go as far in restructuring the system as many industry experts expected in light of the implosion of insurance behemoth American International Group Inc. The current system has $6.3 trillion in assets under state-regulated management and is supervised at the state level by insurance commissioners.
The Financial Services Roundtable, in particular, has been out front lobbying for a federal charter to be included in the financial regulatory overhaul.
The proposal is a good first start, said FSRs Scott Talbott. Were going to continue to push to give the insurance industry a federal charter.
If you look at the principles Treasury espouses, those can only be accomplished through a federal charter, he added.
Proponents of the state regulatory system disagree, arguing that the White House did not mandate a federal charter because it isnt needed.
You dont want to try to fix what aint broken, said Robert Gordon of the Property Casualty Insurers Association of America. Were very pleased that the administration recognized that the current [financial crisis] did not stem from widespread problems in the insurance industry.
Still, thats not slowing down the Roundtable.
The trade association is expected to send a letter to Congress this week asking lawmakers to give insurers the ability to be regulated at the federal level.
Additionally, Agents for Change, a group of more than 7,000 insurance agents, is hosting its annual legislative conference Wednesday. The group will have several dozen of its members meeting with more than 60 Members of Congress lobbying to share their stories as to why the state-based regulatory system is failing them, but more importantly why it is failing their clients, according to Agents for Change Executive Director Peter Ludgin.
The AIA is also pushing for a federal charter, but additionally it is focusing on making sure Obamas plan is successfully implemented.
I think going forward we are going to work with the administration in getting an effective Office of National Insurance up and running, AIA head Leigh Ann Pusey said.
So far, AIA hasnt undertaken a major ad campaign on the issue but could in the future, according to AIA spokesman Blain Rethmeier.
Advocates of the federal charter have been cheered by the growing support for a bill by Reps. Melissa Bean (D-Ill.) and Ed Royce (R-Calif.) that would set up an optional federal charter, according to insurance lobbyists.
Reps. Jim Cooper (D-Tenn.) and Debbie Halvorson (D-Ill.) signed on to co-sponsor the bill last week.
Rep. Elijah Cummings, D-Md., right, hugs Harold Schaitberger, General President of the International Association of Fire Fighters, after the Congressman spoke at the IAFF's Legislative Conference General Session at the Hyatt Regency on Capitol Hill, March 9, 2015. The day featured addresses by members of Congress and Vice President Joe Biden.