Insurance industry interests fighting an optional federal charter for insurers may have a new foe to contend with—a mandatory federal charter for insurers.
Melissa Bean (D-Ill.), co-sponsor of the National Insurance Modernization Act (NIMA), says one of the remaining issues stalling the legislation is whether a federal charter would be optional or mandatory for insurers deemed systemically significant. Rep. Bean, who is co-sponsoring the bill with Rep. Ed Royce (R-Calif), made the announcement in Washington at the 2009 Insurance Reform Summit held by the Networks Financial Institute at Indiana State University.
The sponsors began publicizing their plans for insurance reform last month, but made no mention of a making the federal charter for insurers mandatory for large insurers.
The act creates a federal regulator, the Office of National Insurance (ONI), to oversee federally chartered insurance companies, agencies and producers. States would maintain oversight responsibilities for companies not opting for the federal charter. According to the sponsors, the law will ensure there is a physical ONI office in every state, housed in either the Office of the Ombudsman or the Division of Consumer Affairs.
According to Bean, the bill will be introduced into the House in the next several weeks after some additional fine-tuning.
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