OFC Gets A Boost From Bernanke Statement

 

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Copyright 2009 Crain CommunicationsAll Rights Reserved Business Insurance

March 2, 2009

OPINIONS; Pg. 8

242 words


OFC gets a boost from Bernanke statement

FEDERAL RESERVE CHAIRMEN often speak in oracular terms, as former Fed Chair Alan Greenspan demonstrated repeatedly. Fortunately, successor Ben Bernanke sounded a bit more straightforward last week when asked his opinion on optional federal charters for insurers.

As we report on Page 3, Mr. Bernanke stopped short of endorsing the notion entirely, but he did say he thought the OFC was a ``useful idea,'' particularly where ``large, systematically critical insurance companies'' are involved. He added that ``holding company-level supervision of systematically important institutions is very important,'' noting that such oversight did not exist ``in some of the cases where we have had problems. So I do believe an optional federal charter would be a direction worth giving serious consideration.''

We couldn't agree more. We've long supported the OFC concept for insurers and producers. As Congress tackles issues of systemic risk regulation in general and insurance industry regulation in particular, the OFC demands careful consideration.

As we and other OFC supporters have noted before, we're under no illusions that effecting such a fundamental change in regulation will be either easily or swiftly accomplished. But Mr. Bernanke's straightforward assertion that the OFC is a ``useful idea'' when considering responses to the economic crisis can only help make reaching the goal of optional federal insurance regulation that much easier to achieve.

March 5, 2009

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