Washington, D.C.--The American Council of Life Insurers (ACLI) announced today that it is joining with Computer Sciences Corporation, a leading information technology services provider, to evaluate state and federal regulatory environments for the U.S. life insurance industry, report on the economic impact of the current state-based charter system, and assess the potential for improvement under an optional federal charter system.
ACLI has been vigorously pursuing insurance regulatory efficiency and modernization on a two-track basis: an optional federal charter (OFC) proposal and multifaceted regulatory improvement initiatives at the state level. ACLI's OFC proposal would allow life insurers to seek either a federal or a state charter based on the particular needs and circumstances of their business operations and the needs of their customers. It would also afford similar flexibility to life insurance agents. ACLI also has been working aggressively on reforms such as modernization of product approval processes, market conduct, and producer licensing in the states.
This new relationship with CSC further reflects ACLI's commitment to regulatory efficiency and modernization. As part of the joint research effort, CSC will survey insurance companies to identify business expenses incurred by life insurers in the current regulatory environment. The final report will also include a forecast of business expenses under a federal charter and what the financial and competitive impacts would be for a company weighing a move from a state to a federal charter.
"We look forward to working on this project at such a pivotal time for the insurance industry," said Michael W. Risley, president of the Life and Health Division of CSC's Financial Services Group. "Our analysis of the economic effect of any changes or enhancements to the insurance regulatory system will provide critical information for policymakers and ACLI membership."
"Regulatory reform and modernization are crucial to the continued success and competitiveness of life insurers," said ACLI Senior Vice President and General Counsel Gary Hughes. "And this project will provide an important body of research that advances that effort."
"In today's rapidly evolving financial services marketplace, it is imperative that the life insurance industry stays competitive. Our efforts to reform the current regulatory environment will not only benefit our business franchise but consumers as well," Hughes added.
Source: The American Council of Life Insurers
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