GAO Says Congress Should Weigh OFC

Chicago — A mammoth new report from the U.S. Government Accountability Office, “A Framework for Crafting and Assessing Proposals to Modernize the Outdated U.S. Financial Regulatory System,” offers support, somewhat tepidly, for an expanded federal role in insurance regulation.

“Congress could consider the advantages and disadvantages of providing a federal charter option for insurance and creating a federal insurance regulatory entity,” it states. “We have not studied the issue of an optional federal charter (OFC) for insurers, but have through the years noted difficulties with efforts to harmonize insurance regulation across states through the NAIC-based structure. The establishment of a federal insurance charter and regulator could help alleviate some of these challenges, but such an approach could also have unintended consequences for state regulatory bodies and for insurance firms as well.”