Even though Rep. Oxley ruled out optional federal chartering, the Washington-based American Insurance Association, which supports OFC, said his road map would bring significant improvement for insurance consumers.

"Chairman Oxley showed strong leadership in telling state regulators, many of whom oppose national reforms, that the time has come for Congress to act and fix this broken system," said Drew Cantor, vice president for government affairs with AIA.

"We are encouraged by his vision for the future, which is based on free markets, and his active promotion of meaningful reform," Mr. Cantor said.

David Winston, vice president of federal affairs for the Indianapolis-based National Association of Mutual Insurance Companies, which opposes OFC, said NAMIC is pleased that Rep. Oxley has taken optional federal chartering and a federal insurance regulation off the table.

He said that NAMIC appreciates Rep. Oxley's recognition of what he called in his speech the "critical strengths" of the state insurance regulatory system and the fact that all the insurance regulatory expertise resides at the state level.

Mr. Winston also praised Rep. Oxley for recognizing that states are much more responsive than the federal government to the needs of the local marketplace and consumers.

Anne Sittmann, a representative of the Des Plaines, Ill.-based Property Casualty Insurers Association of America, also praised Rep. Oxley for his focus on state-based reform and its benefits to consumers.

"PCI's primary goal in pursuing regulatory modernization is to promote competitive markets and ensure reasonable, efficient and effective regulation," Ms. Sittmann said.