"What They're Saying" About the Treasury Blueprint
Supporting comments
April 1, 2008
“The risk management and commercial insurance buyer community has long supported the concept of an optional federal charter and believes that a regulatory system structured in the method proposed will provide an effective and much more efficient process to manage insurance transactions for policyholder operations,” Terry Fleming, a member of RIMS’ board of directors and director-division of risk management for Montgomery County in Rockville, Md., said in a statement released Tuesday. – Business Insurance, RIMS backs call for optional federal charter 4/1/08
Allstate, for one, said it is "encouraged" by the Bush administration's proposal. "If done correctly, a federal insurance-regulatory system could reduce costs by eliminating inefficiencies, streamline the process of making new products available to consumers and ensure a consistent level of consumer protection in each of the 50 states," Allstate spokesman Rich Halberg said. – Chicago Tribune, Proposal to give insurers choice of U.S., state rules, 4/1/08
Ed Rust Jr., Chairman and CEO of State Farm, the nation's leading vehicle and home insurer, said, "The current regulatory structures make serving insurance customers across the country complicated, costly and cumbersome. Increasingly, insurance challenges are also national and international in scope. In the 21st century, we should be able to do better for our customers. That is why we applaud Secretary Paulson's call for an optional federal charter." - SunHerald.com, State Farm Supports Treasury Secretary's Call for Optional Federal Charter for Insurance, 3/31/08
"Establishing an optional national insurance charter would increase benefits to consumers, enhance the global competitiveness of the American insurance industry, and bring greater uniformity and effectiveness to the regulatory process," the [American Bankers Association] said in a statement. – Charlotte Observer, Supporters of state regulators not impressed, 4/1/08
"Insurance is an increasingly global business, and inherently interstate, but state-by-state insurance regulation has failed to keep pace with convergence and consolidation," said Ken Crerar, president of The Council of Insurance Agents & Brokers. "These reforms will increase service and safety to consumers and lead to more innovations." – Insurance Journal, Industry Lines Up 'Pro and Con' on Bush Plan for Federal Insurance Regulator, 3/31/08
Joel Wood, the Council's chief lobbyist, noted that the legislation is modeled after the dual banking regulatory system. "The most important word is 'optional,' which too often gets lost in the intra-industry acrimony surrounding this legislation," he said. "We believe state regulators try to do the best job they can to protect policyholders, and that role will be preserved for insurers and producers who choose a state charter. However, we believe in a national and global economy, given increasing competition in the financial services sector, an appropriately regulated national chartering system would provide the maximum protection for clients with the least cost from duplication in 50-plus jurisdictions." – Insurance Journal, Industry Lines Up 'Pro and Con' on Bush Plan for Federal Insurance Regulator, 3/31/08
Former Assistant Treasury Secretary Wayne Abernathy also said the value of having both state and national charters has been shown by the banking system, which already offers state or federal charters.
"The logic of it is pretty compelling, and the value of it has been documented by our dual-banking system," said Mr. Abernathy, who is in charge of regulatory affairs at the American Bankers Association. – Wall Street Journal, Treasury Stakes Out Position On Federal Insurance Regulation, 3/29/08
"Consumers would have greater and more timely access to a wider range of products, as well as receive uniform consumer protection regardless of where they live. In turn, insurance companies and agents would enjoy streamlined licensing procedures and save significant costs on related administrative issues." [Massachusetts Mutual Life Insurance Company] – CNBC.com, MassMutual Commends Treasury Secretary Paulson for Inclusion of Optional Federal Charter in Proposed Regulatory Blueprint, 4/1/08
“This long overdue measure would create greater efficiency and modernization for the insurance regulatory system,” said American Bankers Insurance Association executive director, Kevin McKechnie. – The Bond Buyer, Treasury Pushes Reforms, 4/1/08
Joel Wood, senior vice president for government affairs at the CIAB, said the fact that a conservative Republican administration would embrace the OFC structure “speaks volumes for the slow but steady progress that supporters of an OFC have made in moving toward a rationalized insurance regulatory scheme.” - National Underwriter, Treasury To Back Optional Federal Charter For Insurers, Brokers, 3/29/08
Eli Lehrer, a senior fellow at the Competitive Enterprise Institute in Washington, who has studied and lectured on the insurance regulatory issue for several years, said his initial reaction is that “Treasury has taken the right approach. This really is a question of international competitiveness as much as anything else.” - National Underwriter, Treasury To Back Optional Federal Charter For Insurers, Brokers, 3/29/08
New York Democratic Sen. Charles Schumer, who chairs the congressional Joint Economic Committee, said in a statement on Friday night that Paulson was "on the money when he calls for a more unified regulatory structure". – The Guardian (UK), U.S. seeks enhanced financial authority for Fed, 3/29/08
The chairman of the House Financial Services Committee, Democratic Rep. Barney Frank, last week said Congress should seriously consider giving a federal agency the power to monitor all risk in the financial system and act when necessary, regardless of its corporate form. Frank suggested one possibility would be to empower the fed as "Financial Services Risk Regulator," an idea that Treasury's proposals appear to broadly embrace. - The Guardian (UK), U.S. seeks enhanced financial authority for Fed, 3/29/08
In response to the Treasury's report, Mortgage Bankers Association (MBA) Chairman Kieran P. Quinn says the "MBA believes we absolutely must have modern, world-class regulation of our financial system, and we appreciate Secretary Paulson's leadership on this issue." – MortgageOrb, Treasury Releases Blueprint for Regulatory Structure, 4/1/08