In general, most p-c trade groups urged the Obama administration to tread carefully in revising current financial institution regulatory schemes. They were commenting on Mr. Geithner's speech yesterday before the House Financial Services Committee outlining the Obama administrations plans to tighten regulation of financial services companies.

The administration also provided Congress with proposed regulation that would extend the authority for the FDIC to allow it to take control of large, non-bank financial services firms, including insurers, and to either rehabilitate them or place them in conservatorship or receivership.

"Draining capital intended to protect policyholders could potentially undermine an industry that is largely solvent in order to prop up other industries with solvency problems. We are very concerned about the potential for harm to consumers and the marketplace," said David A. Sampson, president and CEO of the Property Casualty Insurers Association of America.

"We urge Congress to carefully examine this entire proposal and ensure that it does not create unintended consequences, such as potentially undermining a largely healthy industry–and hundreds of millions of consumers–to bail out troubled, excessive risk-taking sectors of the economy," he said.

Regarding Mr. Geithner's remarks about an optional federal charter, the American Insurance Association said it supported such legislation.

Leigh Ann Pusey, AIA president, said "it was encouraging to hear Secretary Geithner indicate there was a 'good case' for introducing an optional federal charter for insurance companies. We are optimistic and recognize that any reforms must be responsive to the evolving economic climate."

Ms. Pusey acknowledged that p-c companies "do not pose the same types of systemic risk challenges to our economy as other financial services sectors."

But, she added, "given the national and global nature of the risk assumed by the property-casualty industry and its importance to a well-functioning economy, the industry needs to have a seat at the federal regulatory table alongside the other federal financial regulators."

The National Association of Mutual Insurance Companies and the Independent Insurance Agents and Brokers of America took a different view.

Jimi Grande, vice president for federal and political affairs of the National Association of Mutual Insurance Companies, said in reaction to Mr. Geithner's testimony and answers to questions, "NAMIC is pleased that a number of members on the committee, as well as the secretary, reiterated their support of the state-based regulatory system for insurance."

But he noted, "While Secretary Geithner told the committee that any federal regulatory authority should not supplant the effective state regulation of insurance, he left open the door to discussion of an optional federal charter.

"We are concerned that the secretary and some members of Congress may use the current crisis as an opportunity to establish federal regulatory authority over insurance activities," said Mr. Grande.

"Property-casualty insurance regulation should remain at the state level since efforts to establish an optional federal charter or federal oversight of property-casualty insurance would lead to inefficient, costly and confusing dual regulation," he said.

Charles E. Symington Jr., senior vice president for government affairs for the Independent Insurance Agents and Brokers of America, said IIABA "agrees that state regulation should not be 'supplanted' by a new federal regime."

However, "we are concerned with his comments that a 'good case could be made for an optional federal charter,' the type of regulation that helped contribute to the current crisis," he added.