Optional Federal Chartering for Insurers: Major Interest Groups

Publication Date: September 2003

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Business

Type:

Abstract:

Since passage of the Gramm-Leach-Bliley Act in 1999, Congress has focused new attention on the question of federal chartering for insurance companies. During the 107th Congress, proposals were brought forward by Senator Charles Schumer, "The National Insurance Chartering and Supervision Act"(NICSA), and Representative John LaFalce, H.R.3766, "The Insurance Industry Modernization and Consumer Protection Act" (IIMCPA). Although different in some particulars, both proposals were modeled on the dual state/federal regulation that now exists for the banking industry and would have given insurance companies the option to be chartered and regulated by a newly established federal regulator rather than by current state regulators.

In the 108th Congress, Senator Ernest Hollings has introduced S. 1373, the "Insurance Consumer Protection Act," on July 8, 2003. Unlike the earlier proposals, S. 1373 would create a mandatory system of federal regulation for all interstate property/casualty and life insurers.

Insurance companies doing business in the United States have been regulated at the state level for the past 150 years, and the various insurance related interest groups have been largely state oriented. As a result, there is limited familiarity on the national level with these insurance industry-related interest groups or how they differ in their positions on federal chartering legislation. This report identifies some of the major insurance groups and state-related organizations with an interest in federal chartering and regulation of the insurance industry. This report, originally written in 2002 by S. Roy Woodall Jr., will be updated as major legislative events occur.