Bob Graham, Executive Editor

The simmering debate over how to regulate insurance in this post-AIG bailout 1, 2 and 3, Bernie Madoff scandal and “will-I-have-enough-to-retire-in-20-years? world appears to have taken yet another turn, according to an article at IFAwebnews.com.

A consumer group, Consumer Watchdog, is calling the proposed optional federal charter the equivalent of no regulation at all. The group argues that if you give the insurers a choice between state and federal regulation, they will select the path of least resistance. Put another way, they’ll go to the regulator that provides them the best result. Who wouldn’t?

It’s a good argument against an OFC.

Good enough, in fact, that some have already come out against it. Frank Keating, president and CEO of the American Council of Life Insurers, which advocates creating an OFC, disagrees with the assessment. He said in a prepared statement that an OFC “would close this gap. The national insurance regulatory office would perform two functions. First, it would directly regulate those insurers that are federally chartered. Second, through its direct regulatory activities and interactions with fellow regulators, the office would have a window on the broader insurance market and be able to spot trends that might affect the system.”

Isn’t the second part what the National Association of Insurance Commissioners’ does? Effectively for a number of years, in fact.
Consumer Watchdog’s efforts may lead to more public interest in this largely inside insurance world issue, and public comment and concern are ultimately what is needed to propel any serious atempt at insurance regulatory reform.