(Chicago, Illinois – April 1, 2008) The Bush administration’s new blueprint for financial reform includes a call for insurance companies to be given the option of federal instead of state regulation, along with the creation of a powerful national insurance regulator and a system of national licensing of insurance carriers.
To date, the media has devoted a considerable amount of attention to the new financial proposals … but not enough to the proposed Optional Federal Charter for insurance companies.
Experts contacted by The Heartland Institute offered the following comments about the proposal. You may quote from this statement or contact the experts directly at the phone numbers and email addresses provided below.
“Something needs to be done to help insurance consumers. State insurance regulations are costing consumers nearly $14 billion in higher premiums.
“Our recent surveys have found that consumers do not believe state insurance regulations benefit them. Instead, surveyed consumers say they want interstate insurance competition and believe this competition will lead to lower consumer prices.
“Consumers want choice. Good drivers are tired of subsidizing bad drivers, and inland homeowners are tired of subsidizing wealthy coastal homeowners. An optional federal charter will give consumers the choice they need to avoid these special-interest state regulations. If you want to help consumers, give them choice.”
American Consumer Institute
“For those who support a more open and creative insurance market, this report is a major step forward. It’s not perfect but, on insurance issues, it outlines a productive way forward.
“Obviously, the Treasury envisions change that’s going to be painful for some agents and some brokers. In the long term, however, I’m convinced it will make the American people better off.
“The Treasury was absolutely right to put this in terms of international competitiveness. Relative to other OECD nations, our insurance sector is not very productive. The morass of state regulation has also stifled innovation. There hasn’t been a single major new personal lines product since 1959.”
Competitive Enterprise Institute
and The Heartland Institute
For more information about The Heartland Institute, please contact Harriette Johnson, media relations manager, at [email protected] or 312/377-4000.