In testimony before the House Financial Services Committee Federal Reserve Chairman Ben Bernanke seemed receptive to federal regulatory presence in the insurance market.
Bernanke was asked by Rep. Ed Royce (R - Calif.) whether he thought a federal insurance regulator was needed to mitigate systemic risk.
“Well the issue of the option of a federal charter for insurers is a complex one and there are a lot of issues involved, but to cut to the bottom line, I think that it would be a useful idea to create a federal option for insurance companies particularly for large systematically critical insurance companies,” Bernanke said. “And in general holding company-level supervision of systematically important institutions is very important. “
Royce are Rep. Melissa Bean (D.-Ill.) are co-sponsors of the forthcoming National Insurance Consumer Protection and Regulatory Modernization Act, which would create a federal regulator, the Office of National Insurance, tasked with widespread oversight of the insurance industry.
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