Financial services industry representatives have urged the US Congress to give the Federal Government a wider role in regulating the nation’s insurance industry, which is at present run by state-appointed regulators.

The US Treasury called in April for federal insurance regulation of the industry.

The American Insurance Association, the Council of Insurance Agents and Brokers and the Risk and Insurance Management Society all support the proposal.

Now the powerful American Bankers Association has joined the fray, with its President Edward Yingling telling a congressional committee it would be an oversight not to develop a federal approach to insurance regulation.

He says few foreign companies are attracted to investing in the US insurance market because nationwide compliance is complicated by “a multitude of individual state regulators”.