If the National Insurance Act of 2007 becomes law it may well lead to a revolution in the insurance industry. At present, insurance is regulated state by state. This bill would allow insurance companies to be chartered by the federal government and to be governed by one set of regulations instead of 51. This expert commentary analyzes some of the more significant provisions of the provocative bill, including:

• Its optional rather than mandatory nature
• The Office of National Insurance it would create
• How the bill would separately impact life insurance companies and property/casualty insurance companies
• The effect the federal licensing of insurance agencies and producers would have on the way insurance is sold
• What state laws would still apply to the insurers who opt to become federally chartered
• What types of regulations the new federal Commissioner of Insurance would be required to establish
• What enforcement powers and other powers the Commissioner would have
• When federally chartered insurers would have to join the National Insurance Guaranty Corporation
• The bill’s antitrust implications

The commentary also discusses the reasoning of the bill’s proponents and opponents. One the one side is Representative Bean (who introduced the bill) stating “eliminating the need to coordinate with 51 state regulators and accelerating the time to market will foster greater industry innovation and agility.” On the other side is the National Association of Mutual Insurance Companies’ President Bykowski opinion, “State insurance regulation has the capacity to adapt to local market conditions, to the benefit of consumers and companies and affords states the opportunity to experiment and learn from each other.”