There should be no rush to judgment, Ernie believes. Introduction of the Senate bill only “marks the opening bell of what promises to be a prolonged debate in Congress over the future of insurance regulation…PCI will closely examine the bill and will be engaged in every stage of the debate over this measure and the SMART Act approach.”

But where does PCI stand? “Our goal is and has always been to support a system that fosters a fair, effective and efficient regulatory environment that enhances the competitive marketplace,” he said, leaving PCI's options wide open.

PCI–boasting over 1,000 member companies writing 40.7 percent of the nation's p-c market–is “a strong supporter of state insurance regulation because we believe this system provides the most desirable means through which to achieve a competitive marketplace,” he added.

However, he cautioned, “many insurers are frustrated with the inability of some states to enact meaningful reforms…This frustration provides momentum for measures such as OFC and SMART.”

No one can afford to shrug off the latest initiative as mere posturing, Ernie believes. “As a former state regulator, I sincerely hope my colleagues in the regulatory community, the NAIC and in state legislatures across the country realize the threat of federal intervention in insurance regulation is not a paper tiger.”

While conceding the Senate bill is “certainly not likely to be enacted this year,” he hopes its introduction “will spur states to modernize the regulatory environment.”

He warned those gleeful about the prospect of a federal charter that “while initial information about the proposed OFC legislation indicates the bill contains several important free market provisions, it is important to remember the measure is likely to be drastically changed as it undergoes congressional scrutiny.”

He said PCI “remains concerned about the establishment of a new federal bureaucracy with far-reaching authority over the insurance industry that is subject to the political whims of Congress.”

Ernie would like to see a compromise–and I second the motion. “At this point,” he said, “we believe the positive elements of the OFC proposal can be incorporated into a much less intrusive concept–the SMART Act–that would preserve state regulatory authority but establish federal standards for key areas of oversight…that would make the system work better for insurers, agents and brokers, and consumers.”

I'm with Ernie on this one.