Pennsylvania Rep. Paul Kanjorski said that if the Obama Administration’s proposed Consumer Financial Protection Agency is passed, an optional federal insurance charter would be unnecessary.

Paul Kanjorski

“After this [is approved], I don’t think we need a federal charter,” said Kanjorski, the leading Democrat on the House Financial Services Committee and strong supporter of the federal regulation of insurance.

Kanjorski spoke at the House committee hearing on the Obama Administration’s proposal to create a Consumer Financial Protection Agency to guard consumers from problems in insurance and financial service products.

The insurance industry has been split on the optional federal charter plan, which would permit insurers the option to obtain one national approval for products and agents to obtain multi-state licensing.

Kanjorski predicted it would take “five to 10 years to resolve” the issues regarding where state and federal regulators would have jurisdiction under the CFPA. Under the proposal, federal regulators would be responsible for aspects of regulation of financial service products, including insurance, that protect consumers, while state regulators would be responsible for solvency issues, among others; however, experts speaking at the hearing said they were unsure where the lines would be drawn.

In May, Kanjorski introduced HR 2609, calling for a National Insurance Office within the Treasury to provide advice and expertise on insurance regulation to the Obama Administration and Congress.

The approach taken by the Obama Administration to introduce the legislation raised a red flag for Kanjorski. “Never in my years have I see a devious, back-door way to come into federal legislation than to do it this way,” Kanjorski said.

“Anything that gets the title of ‘consumer’ gets an express ticket” to approval, Kanjorski said.

In April, the congressman told the North American Securities Administrators Association, that he would push for federal regulation of insurance and hedge funds, but disagreed with Obama’s fast-paced moves in that direction. At the April 28 event, Kanjorski said new regulation for insurance companies is “going to happen” as “we have to have it happen; we don’t have a choice right now.”