(WASHINGTON - Jan. 12, 2009) — The Independent Insurance Agents & Brokers of America (the Big “I”) released the following response to a recent GAO report on financial regulatory reform.
“In light of the framework for modernizing the U.S. financial regulatory system recently released by the GAO, the Big “I” believes that policymakers must recognize that there are areas where existing regulatory regimes have and continue to work well for both consumers and the industry,” says Robert Rusbuldt, Big “I” president and CEO. “The GAO, like the Big “I”, recognizes the need for great harmonization between regulatory systems and the need for greater uniformity in the state regulatory system. However, while the state regulatory system needs greater uniformity through targeted federal legislation, the state regulatory system has served both consumers and the marketplace well, particularly in comparison to federal regulation in a number of other areas.”
“Despite some assertions to the contrary, the GAO does not formally recommend that an optional federal charter (OFC) be debated,” added Charles Symington, senior vice president of government affairs. “The study only mentions OFC in passing and that an OFC regime could be considered by Congress.”
“Once OFC is studied fully through the prism of the recent financial services market turmoil, it will be clear that it would only promote a race to the bottom and result in haphazard deregulation to the detriment of consumers,” says Symington. “We believe that the GAO’s comment that there could be ‘unintended consequences for state regulatory bodies and for insurance firms as well’ from such a system is fair warning that an OFC would create many more problems than it would allegedly solve.”
Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, health, employee benefit plans and retirement products. Web address: www.independentagent.com.