IIAB Response to Optional Federal Charter Disappointing, Inaccurate

Revised: 09/22/2006

INDEPENDENT INSURANCE AGENTS & BROKERS OF AMERICA’S RESPONSE TO OPTIONAL FEDERAL CHARTER DISAPPOINTING, INACCURATE

“The reaction of the Independent Insurance Agents & Brokers of America (IIABA) to our June 13 letter expressing broad industry support for an insurance federal charter option is disappointing and inaccurate. It is beyond dispute that major restructuring of the insurance regulatory framework is long overdue and that the status quo is no longer a viable option. The rigid confines of the past work to the disadvantage of our customers and deny companies, agents and brokers the flexibility they need to compete effectively in today’s marketplace.

“Indeed, insurance regulatory reform must be driven by the needs of our customers and by the demands of operational efficiency. The optional federal charter initiative does just that.

“Meanwhile, the large number of companies and trade organizations signing on to our June 13 letter demonstrates extremely broad support within the insurance industry for an optional federal charter, including major support from the agent and broker community. From an industry-wide perspective, the IIABA’s resistance to this change reflects a distinct minority view.

“Insurance is now a global business providing an invaluable array of products and services to protect our property, our lives and our financial security. As such, it deserves a modern system of regulation that includes of both an effective state regulatory system and a regulatory presence in Washington. The time to implement that system is now.”

The OFCC represents the largest and most diverse group to push for a modernized insurance regulatory system. Corporate supporters serve millions of consumers and represent every branch of the insurance and banking industry. Trade group members include Agents for Change, American Bankers Association, American Bankers Insurance Association, American Council of Life Insurers, American Insurance Association, The Council of Insurance Agents and Brokers, The Financial Services Forum and The Financial Services Roundtable.

BIG “I” DISPUTES OFCC GROUP INACCURACIES ON OPTIONAL FEDERAL REGULATION OF INSURANCE

WASHINGTON, D.C., June 21, 2005—The Independent Insurance Agents & Brokers of America (Big “I”) today issued the following statement from CEO Robert A. Rusbuldt in response to an inaccurate characterization from the OFCC regarding the Big “I” position on Optional Federal Regulation of Insurance:

The Independent Insurance Agents & Brokers of America strongly denies any inaccuracies in our characterization of optional federal regulation or the Oxley/Baker SMART proposal. In fact, we agree with the OFCC statement that “Indeed, insurance regulatory reform must be driven by the needs of our customers and by the demands of operational efficiency.” However, we disagree with the OFCC on the means to obtain this goal. We believe that targeted federal reform of the state system, proposed and supported by Chairman Oxley and Chairman Baker in the SMART Act proposal, makes much more sense for insurance consumers and for bringing about immediate efficiency in our regulatory system.

Although we agree on the goals, because we disagree on the means to obtain those goals, it appears that the OFCC has made a false allegation that we are inaccurate. This is not about the number of supporters vs. opponents since agents and regional companies overwhelmingly oppose federal regulation of insurance. However, independent agents strongly support reform of the current system.

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