Members of the National Association of Professional Insurance Agents launched a vigorous lobbying effort on Capitol Hill today battling a new Senate bill that would provide some federal regulation of producers and insurers.

“We adamantly, adamantly, adamantly oppose the optional federal charter [legislation],” PIA Executive Vice President and CEO Leonard C. Brevik said at the group's Federal Legislative Summit before approximately 200 PIA members went to meet with their representatives and senators.

Mr. Brevik blasted the optional federal charter bill introduced yesterday by Sens. John Sununu, R-N.H., and Tim Johnson, D-S.D., as something that reads like a book by horror novelist Steven King. The measure's language, he noted, classifies PIA members under the category of “others” in the section regarding producers.

For the insurance industry as a whole, Mr. Brevik predicted that a federal regulatory system would prove to be a disaster, based on the recent performance of other government agencies.

Referring to the Federal Emergency Management Agency debacle after Hurricane Katrina, Mr. Brevik asked, “Can you imagine this from the federal government that brought us FEMA?”

In the event of a natural disaster like Katrina, Mr. Brevik said insurance agents would face twice as many problems working with a federal regulator than they would with the state-run system.

“In addition to a national, natural disaster, we'd have a man-made disaster called the optional federal charter,” he said.

The current state-based system, Mr. Brevik said, “has worked for 135 years.” While acknowledging that insurance agents have not always seen eye to eye with the National Association of Insurance Commissioners and its members, Mr. Brevik said, “We know that state regulation works.”

Meanwhile, another group, Agents for Change, has expressed its support for the OFC legislation, arguing that it better provides for consumers and agents.

“The most pressing reason to enact an OFC is for consumers–not for producers,” said Robert Poli, chairman of the group. “Consumers are frustrated with the lack of choice among insurance products and coverage in the current system. They simply don't understand why a product that is available in Illinois is not offered in Indiana or Missouri, or why they may not be able to continue their relationship with their insurance agent when they move out of state.”

By way of rebuttal, Mr. Brevik noted that Agents for Change is the creation of several supporters of the OFC concept, including the American Council of Life Insurers and the American Insurance Association.

Mr. Brevik said that PIA, in contrast with Agents for Change, is “an organization with real grass roots; we're not AstroTurf.”

He noted that state-based regulators “know better than federal regulators” how to regulate insurance while ensuring that consumers are protected, and called on the PIA members to emphasize their opposition to the Johnson-Sununu bill as they met with their elected officials.

“We need to keep it fiction,” he said.