Web Memo: How an OFC Would Impact the States
Two sitting state governors—Kansas Democrat Kathleen Sebalius and Georgia Republican Sonny Perdue—recently wrote to their 48 peers asking them to contact their state’s “congressional delegation and urge their opposition to an Optional Federal Charter” (OFC) for insurance companies. Their letter opposes two very similar National Insurance Act bills (S. 40 and H. 3200) that have been introduced in the Senate and House respectively.
CEI does not have a position on either of these bills but we do support the concept of optional federal chartering for insurance companies. This memo attempts to provide analysis and insight on the governors’ letter and describe how insurance reform might impact the states and their insurance regulatory systems. It analyzes three major claims made in the letter relating to the reach of an OFC, its impact on state tax revenues, and consumers’ attitude towards insurance regulation.