Resolution Opposing Federal Insurance Chartering

BE IT THEREFORE RESOLVED, that The Council of State Governments supports and encourages state actions to preserve the pre-eminence of state insurance systems and seeks to educate state elected officials on the potential ramifications of a bifurcated scheme on consumers and state revenues.
 

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All Resolutions Passed at the 2007 Spring Meeting

WHEREAS, state insurance protection safeguards individual and commercial policyholders, and thereby galvanizes the strength of the U.S. insurance markets through diversity addressing unique local concerns; and

WHEREAS, state officials are effective stewards of the insurance marketplace and can preserve these unique and diverse consumer protections; and

WHEREAS, insurance is a unique industry apart from banking and securities and presents issues that state officials are best able to address; and

WHEREAS, federal chartering would disrupt insurance markets and harm consumers; and

WHEREAS, federal chartering would create a bifurcated regime which would only add an additional layer of bureaucracy whereby companies would be able to “opt out” of consumer protections and state oversight; and

WHEREAS, federal chartering threatens state revenues of nearly $14 billion a year in lost state insurance premium tax revenues, fees and assessments; and

WHEREAS, Optional Federal Charter legislation stands to threaten the consumer safeguards that have been put into place by enabling and encouraging the outsourcing of enforcement of insurance industry consumer protections; and

WHEREAS, federal chartering will result in policyholder confusion and market disruption due to the separate and overlapping systems that would be created; and

WHEREAS, an optional federal regulatory system would only be optional for insurers, not for consumers, taxpayers, businesses and local economies.

BE IT THEREFORE RESOLVED, that The Council of State Governments supports and encourages state actions to preserve the pre-eminence of state insurance systems and seeks to educate state elected officials on the potential ramifications of a bifurcated scheme on consumers and state revenues.

Adopted this 13th day of June 2007, at the CSG 2007 Spring Committee & Task Force Meetings in Puerto Rico