Barney Frank, the chairman of the House financial services committee, said this week that he plans to introduce legislation that may include federal oversight of the insurance industry.
Frank said Congress will hold hearings soon on the issue of whether an optional federal charter for insurance companies is needed, which would allow insurance companies to forgo state regulations in favor of abiding by federal rules.
Currently, insurance rates and regulations are overseen by states, but some have argued in favor of uniform regulations.
Frank said his proposal to create a "systemic risk regulator" that would monitor all risk in the U.S. financial system would also cover large insurance companies, according to a report from Reuters.
An optional federal charter is mostly opposed by state regulators and consumer groups who argue it would be less stringent than state-level regulation.
The insurance industry group Insurance Information Institute (III) has said the state system of regulation is "overly complex, anticompetitive and unduly burdensome."
Other proposals for improving regulation include revamping the state-based system to create uniform standards in such areas as market conduct, licensing, the filing of new products and reinsurance, according to III.
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