Chicago - Stating that 50 individual sets of individual insurance regulations results in a lack of transparency and a bottleneck to global trade, Frank Keating, president and CEO of the American Council of Life Insurers, called for an optional federal charter yesterday during his address to the International Insurance Society here.
"The life insurance market is worth $50 billion in premium in Japan and $20 billion in Korea," he said. "When you can speak with one language-rather than 50, you open the market even further."
Keating called the current U.S. regulatory environment "provincial," citing New York-based American International Group Inc., as one carrier that has recently successfully expanded overseas.
"The post-Enron world is one in which the tolerance level of the public has changed," he said. "For example, a consumer purchasing annuities won't settle for delays or lengthy explanations. They don't want opaque or limited information about their investment. People won't buy your products if there is too much fine print."
Keating predicted that a soon-to-be-introduced optional federal charter companion bill to Senator John Sununu's National Insurance Act of 2006, which will allow both P&C and life carriers to choose federal rather than state charters, "is the only way to have transparency."
The American Council of Life Insurers, Washington, D.C., represents nearly 400 life insurers that represent approximately 95% of U.S. annual premiums.
Source: INN
