US legislation that allows life and property/casualty insurers to choose federal rather than state charters under an “optional federal charter” regulatory system may soon be introduced.

Speaking at the International Insurance Society last week, American Council of Life Insurers President and CEO Frank Keating said US insurers need an optional federal charter system in order to expand overseas.

Mr Keating says it’s likely a companion bill to the National Insurance Act 2006 will soon be introduced in the US House of Representatives.

The council represents nearly 400 life insurers, which write about 95% of US premiums.

Currently insurers are regulated exclusively by the 50 states, a system Mr Keating describes as “provincial”. He says many of these companies want to expand overseas or already have.

However, it is likely the optional federal charter issue will meet stiff resistance from some insurers, the broker community and state regulators.

National Association of Insurance Commissioners President Alessandro Iuppa says a dual system of insurance regulation would create confusion for consumers and policyholders and allow insurers to use regulatory arbitrage to pick the system that benefitted them the most.