Insurers push for U.S. optional charter

WASHINGTON, July 29 (Reuters) - The U.S. regulatory structure for the insurance industry puts companies at a disadvantage overseas and stifles innovation and competition for consumers, the industry told U.S. lawmakers on Tuesday.

At a Senate Banking Committee hearing to consider creating an optional federal charter system, the insurance industry said the current system of state charters also hinders foreign firms from providing products to U.S. consumers.

"The absence of a federal insurance regulator leaves the U.S. insurance industry at a distinct disadvantage," John Pearson, chairman of Baltimore Life Insurance Co, said in prepared testimony.

Pearson, who testified on behalf of the American Council of Life Insurers trade group, said the industry is subject to disparate laws and regulations in various states that stifle innovation.

For several years the industry has been pushing for a federal charter, seeking to shed what it calls the burdens brought on by chartering in different states.

Pearson also said there is a perception abroad that the U.S. system discriminates against foreign companies and acts as a de facto trade barrier.

The issue was recently highlighted by the Treasury Department which proposed streamlining regulation of the U.S. financial services industry, including insurance.

Steven Goldman, New Jersey commissioner of banking and insurance, said the industry has not suffered despite the complaints, citing record industry profits.

According to the Consumer Federation of America (CFA), insurers generated post-tax profits of $253 billion from 2004 through 2007.