Would an OFC subject insurance companies to both federal and state laws, thus increasing the overall burden of regulation?
This is a legitimate concern, but the bills currently before Congress would draw a bright line between federal and state regulation.
However, attempts to erase this line and eliminate the optional nature of the proposed legislation would increase the overall regulatory burden and reduce the market’s role in insurance provision - since it is that very optional nature of an OFC that brings competitive pressures to bear on the regulation of insurance. Congress should be wary of any proposal that subjects state-regulated companies to federal oversight. An OFC will only be effective - and truly optional - if the line between federal and state control remains clear.
