On March 31, Treasury Secretary Henry M. Paulson Jr. made his remarks on President George W. Bush's Blueprint for Financial Regulatory Reform.
In March 2007, a group of industry leaders and policymakers convened for a conference on capital markets' competitiveness. They "concluded that our current financial regulatory system could more effectively promote stable and resilient markets and a more competitive financial services industry." In June 2007, the Treasury department began working on the Blueprint for a "financial regulatory structure that would be more effective and more appropriate for modern financial markets."
Most of the reform involves banks, but insurance companies are also updated to reflect the idea that state-by-state regulation results in differing regulations and difficulties for multi-state operations. In Paulson's remarks, he covered the Optional Federal Charter for Insurance.
"Insurance presents a clear need for regulatory modernization. States have been the primary regulator for insurance for over 135 years. While a completely state-based regulatory system for insurance may have been appropriate at one time, insurance market changes have put increasing strains on the system.
"A state-based regulatory system is quite burdensome. It allows price controls to create market distortions. It can hinder development of national products and can directly impact the competitiveness of US insurers. There have been numerous attempts to modernize the regulatory structure for insurance. At this time, it seems clear that the way forward is to give insurers the ability to elect for federal regulation."
Other areas the Blueprint covers include the mortgage origination process, payment and settlement systems, the merging of the SEC and CFTC, and revocation of the Federal Thrift Charter.
