Optional Federal Charter

  • 2007 1214 - CRS - Insurance Regulation: Optional Federal Charter Legislation - 16p
  • 2004 - AP - Consumer Ramifications of an Optional Federal Charter for Life Insurers, Sheila Bair - 273p
    • Chart - p262
  • 2008 - SOA - Optional Federal Charter (OFC)—Another Acronym, Another Concern, By Norman E. HIll - 5p
  • "OFC proposal"
  • H.R. 3200, introduced last July by Representatives Melissa Bean and Ed Royce, is a strong consumer protection bill, which focuses on a centralized system that emphasizes safety, soundness, and consistency of regulation.
  • And as Representative Bean highlighted, these protections come without sacrificing State premium taxes.
  • We also strongly support the Treasury’s view that an optional Federal charter would play an important role in the new world of integrated financial markets, and would address the burdens imposed by the State system on insurers and consumers alike.
  • Insurers, banks, and capital markets investors are now offering products that may be substitutes for each other...

-- Alastair Shore (CUNA) on Behalf of the American Council Of Life Insurers (ACLI)

2008 0416 - GOV (House) - Examining Proposals on Insurance Regulatory Reform - [PDF-188p

That is why we strongly support the comprehensive approach to improving insurance regulation reflected in the legislation that Senators Sununu and Johnson have proposed.

  • Having an optional Federal charter operating alongside a gradually improving State system of regulation seems to us to be the right way to go.
  • And it parallels the successful dual chartering mechanism we see in the commercial banking sector.

--  John D. Johns,  on behalf of the American Council of Life Insurers (ACLI)

2006 0711 - GOV (Senate) - Insurance Regulation Reform - [PDF-152p

  • If we want to address the problems in the insurance industry, I strongly urge that a federally chartered insurance corporation be set up, along the same lines of the FDIC, to monitor this industry.
  • Indeed, if you think that the property/casualty crisis is difficult, I can assure you that the same crisis will come home, in spades, with the life insurance industry in approximately three to five years and it is not too late to address that crisis.

-- Michael A. Hatch, Commissioner, Department of Commerce, State of Minnesota,

1986 0225 - Letter to Senator Dale Bumpers

1986 Part 2 0220 and 0221 - GOV (Senate) - The Cost and Availability of Liability Insurance for Small Business, Parts 1, 2, and 3 - [PDF-1163p-GooglePlay-link]

  • While I applaud the life insurance industry for attempting to make their case of the need for a dual system of insurance regulation in their bid to compete with federally regulated security products, I still have many concerns regarding various proposals for an optional Federal insurance charter.
    • In particular, proposals which include the property and casualty line of insurance as a part of the Federal charter.
  • As you may know, Alabama has a $1.3 billion per year insurance business, resulting in $240 million of insurance premium taxes every year.
    • A proposed optional Federal insurance charter not only could reduce this important source of State revenue in an era of tight State budgets and dwindling State income taxes but will also threaten the ability for States to adequately fund their State insurance departments. (p6)

-- Spencer Bachus, (R-AL)

2003 1105 - GOV (House) - Reforming Insurance Regulation: Making the Marketplace More Competitive for Consumers - [PDF-200p

Senator JOHNSON. And Dr. Harrington, some of your publications in the early 1990s, you concluded that Federal regulation of insurance and the possible optional Federal charter would not have been an appropriate response and not justified at that time.

  • But since then, you have concluded that States’ regulation of rates, rate classification and policy forms remain dysfunctional in many States and with no obvious end in sight.
  • Can you elaborate just a bit on what has led you to decide that now is the time to start considering Federal regulation or possibly an optional Federal charter?
  • Were there situations and specific organizations and States that led you to the conclusion that States can no longer do an adequate job of insurance regulation.


  • The ACLI strongly supports the creation of an optional Federal charter, or OFC, for life insurers.
  • That is why we strongly support Senate bill 40, the National Insurance Act, which was introduced by Senators Johnson and Sununu and which would establish the Office of National Insurance within the Treasury Department to issue charters and oversee and regulate Federal insurers.


2008 0729 - GOV - The State of the Insurance Industry: Examining the Current Regulatory and Oversight Structure - The Current State of Insurance Regulation, Oversight and Ways to Enhance Consumer Protection, Promote Competition and Efficiency, and to Address What Role, if any, the Federal Government should play

  • [PDF-472p, No Video]
  • As you know, AIA strongly advocates the creation of an optional federal charter (OFC) for insurers.

2008 0616 - H.R. 5840, The Insurance Information Act of 2008 - Letter - AIA - 7p

  • The multi-State nature of a NAILBA agency forces us to be keenly aware of the pitfalls of the current system. In my written testimony,
    • I provided detailed examples of the maze that is the current State-based system.

In closing, NAILBA believes an optional Federal charter approach would provide consumers with increased access to competitive and market-reflected products more quickly.

  • The reduction of costs associated with working with 1 regulator, not 50, would be reflected in the pricing of products.  (p17)

2007 1030 - GOV (House) - Additional Perspectives on the Need for Insurance Regulatory Reform - [PDF-180p