At the very least, said Mr. Kanjorski, the plan should establish a legislative regime for monitoring the systemic risks of failing nondepository institutions.

Rep. Kanjorski also made his comments in an appearance on CNBC before his committee met.

He said he was acting based on the need to bail out insurance conglomerate American International Group.

At the hearing, he said that "AIG taught us that the business of insurance has become complex and no longer fits nicely in the state regulatory box."

He said many insurance products are either of national importance or uniform in nature.

"We must therefore consider whether to regulate these elements of the industry nationally," he said.

The reaction of members of the committee was mixed.

Rep. Jackie Speier, D-Calif., the newest member of the committee and a strong advocate of the state insurance consumer protection laws, said she opposed federal regulation.

She called federal regulation "seriously misplaced and misguided." She also argued that AIG's failure was due to its investment in derivative transactions, which she said were regulated by the Office of Thrift Supervision.

She said the OTS "was largely asleep at the switch."

But Rep. Brad Sherman, another California Democrat, voiced support for Rep. Kanjorski.

"I dream of the days when consumers complained of being denied insurance products on a timely basis" because of state regulations, he said. "Today those problems seem quaint."