[General Points]{.underline}

-   I am appreciative of the opportunity to provide comments and
    appreciate your review of this matter.

-   The current state system of insurance regulation needs to be
    modernized and streamlined, but not replaced.

-   Any federal legislation addressing this matter needs to be targeted
    and limited.

-   The Optional Federal Charter (OFC) proposal is contrary with one of
    the primary goals of insurance regulation -- consumer protection.

[Benefits of State Regulation]{.underline}

-   State-elected/local officials are much more accountable and
    responsive to consumers than a bureaucracy in Washington, D. C.; no
    such accountability would exist in a federally regulated system.

-   The state guaranty fund system is employed as a safety net to
    protect consumers; to develop such a system on a federal level would
    be extremely complicated and unwieldy.

-   Consumer needs and insurance problems vary considerably from state
    to state. Local officials are needed to meet and be more readily
    responsive to those needs.

-   State regulators understand the marketplace in their states much
    better than a bureaucrat in Washington, D. C.

[Problems with Current State Regulation]{.underline}

-   It is expensive for companies to familiarize themselves and pay the
    cost to be regulated in each state. There is a need for greater
    uniformity and efficiency, but that would not necessarily come
    through a federal regulator.

-   Expenses are duplicative in areas such as multi-state agent and
    company licensing, surplus and reinsurance regulation, and policy
    form approval. There are often time delays in obtaining product
    approval in some jurisdictions. Federal standards could be adopted
    for these problem areas, but leave the state regulatory strengths in
    place in areas such as consumer response, consumer protection, and
    solvency regulation.

[A Federal Regulator is Not the Answer]{.underline}

-   While there is need for greater efficiency and uniformity in a few
    areas, an "optional" federal charter would create more problems than
    it could potentially solve.

-   Consumers will be extremely confused by a dually-regulated system.
    They would not know whether to call or contact their state insurance
    department or Washington, D. C., if they have a question or problem.
    This could change each time they changed carriers. They could easily
    be required to contact their state regulator on an auto insurance
    problem/question and Washington on a problem with their homeowner's
    policy.

-   In all of the discussion, the consumer is the one who is forgotten.
    Any look at costs savings to companies and efficiencies does not
    consider the potential angst and confusion to the consumer.

-   Insurance needs vary greatly from state to state. While consumers in
    Oklahoma may need help following a tornado or hail storm, consumers
    in California may have problems or questions following an earthquake
    or wildfire. There would be no means to communicate their problems
    to a local regulator for assistance.

-   An OFC would create a vast, new bureaucracy in addition to one that
    currently exists.

-   Insurance license fees and premium taxes are the second largest
    producer (next to income taxes) of revenue to fund state government
    in Oklahoma. This revenue stream must continue to flow in order to
    properly fund state government. A new bureaucracy in Washington
    could only be funded by additional taxes to the consumer. There is
    no way to fund both systems at the present cost of one system.

-   An OFC would require independent insurance agents and brokers to
    become experts in both systems of insurance regulation.

-   Independent agents who represent multiple insurance companies (some
    regulated by their state/some by the federal government) would be
    forced to deal with both systems to field questions and properly
    represent their clients.

[Insurance and Banking is Not the Same]{.underline}

-   Many say that the banking system exists with dual regulators.
    Banking regulators are concerned with the safety and soundness of
    banks and are not as concerned with consumer issues and protections.

-   Bank products are commodities of a similar nature; insurance
    products vary greatly from state to state.

-   Insurance consumers need an advocate when they have a claim or
    problem with an insurance carrier; there is no such advocate in the
    banking regulatory system.