The Federal Insurance Solvency Act (HR 4900) has many laudable features, but as a regulatory model it is flawed. The dual state-federal regulatory system it mandates will prove unwieldy, and its solvency provisions will conflict with antitrust regulation. One alternative would be a 'carve-out' system limiting federal oversight to areas where the opportunity for state-federal conflict does not exist - alien insurance and reinsurance, for example. Another alternative would be a state-based 'interstate compact' system.

THE MOOD IN THE NATION'S capital is one of eager anticipation. For the first time in 12 years, the Democratic Party controls the White House and both houses of Congress. ...