State lawmakers have urged the U.S. Chamber of Commerce to reverse course and "just say no" to an optional federal charter for insurers.
In a letter to Chamber President Tom Donohue, officers both past and present from the National Conference of Insurance Legislators praised the group for its support of maintaining the insurance industry's limited antitrust exemption under the McCarran-Ferguson Act and sought to convince the Chamber of the negative implications an OFC would have.
"Because we believe that NCOIL and the Chamber share a common goal--that of a competitive and thriving marketplace that serves businesses and consumers alike--we were disheartened to hear recent reports that the Chamber of Commerce is likely to support an optional federal insurance charter, and would like to share with you our concerns regarding an OFC," wrote the NCOIL officers, including its president, Michigan state Senator Alan Sanborn, R-Richmond, the other current NCOIL officers and five past presidents.
The creation of an optional federal charter, the NCOIL officers said in the letter, would bear the same results as what the chamber predicted would happen should the McCarran-Ferguson exemption be repealed--specifically, "a multilayered morass of state and federal insurance rules" promoting "confusion and uncertainty."
"An OFC would bifurcate insurance regulation and cause more harm than good to the industry and the clients that it serves," the NCOIL officers argued in the letter.
Additionally, NCOIL sought to counter the argument that a federal insurance regulator would pose no cost to the states, noting instead the likelihood that taxpayers, and specifically business taxpayers, would bear at least some of the burden.
The additional tax burden, they noted, would also strike business at the state level and erode many of the protections that are in place to insure that businesses can find coverage and that claims are paid.
The NCOIL officers suggested that an even higher cost than the financial burdens an OFC could impose would be the loss of state-enacted consumer protections. They questioned why the Chamber would take a position that, in the eyes of the NCOIL officers, differed from its traditional philosophy.
"We are concerned that the Chamber of Commerce--an organization that for so many years has worked to represent businesses and fight against increased regulation--would now advocate for more government, which is the direct result of the dual, regulatory systems," they wrote. "We would think that the Chamber of Commerce would agree that the last thing business needs is more unnecessary and costly regulation."
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