Finance. The National Association of Insurance and Financial Advisors is backing legislation that would allow insurance carriers to choose whether they will continue to be regulated by states or opt for supervision by a new federal agency. The group’s board of trustees decided Friday to endorse the measure, which has bitterly divided the insurance industry. Large carriers and much of the life insurance industry wants the option, contending it would promote better competition and price structures as well as reduce paperwork. Mutual insurance carriers, state regulators, and independent agents oppose it, arguing premiums would likely rise for those carriers not under state price controls and that consumer protection would be minimal. President Jeffrey Taggart noted in a letter that there were internal divisions, and that its support is based on several conditions that will be finalized at a later date. House Financial Services Chairman Barney Frank has said that it may make more sense to allow life insurers the option for a federal charter because its products are more national in scope compared to auto and homeowner policies.
This article appears in the April 19, 2008, edition of National Journal Daily PM Update.