Frank Keating became president and chief executive officer of the Washington-based American Council of Life Insurers in January 2003, after serving two consecutive terms as Oklahoma's governor. Recently, he offered his thoughts on federal and state efforts to modernize state insurance regulation, sweeping pension changes and the ACLI's opposition to investors seeking an interest in strangers' life insurance policies.

Q: The American Council of Life Insurers has been actively supporting modernizing U.S. insurance regulation through both a proposed federal-level optional charter and a soon-to-be implemented interstate compact on the state level. How would those changes help life insurers of different sizes? Are you concerned about dual regulation?

A: Improved regulatory efficiency will enhance the life insurance industry marketplace in three areas: getting products to market on a timely basis, reforming the market conduct examination process and modernizing the producer licensing system.

The current regulatory system is characterized by delays and unnecessary expenses that hurt companies and consumers. ACLI is working to obtain an optional federal charter that would give companies of all sizes the choice of being regulated by a single, federal regulator or by the individual states, but not both. ACLI also is working with the National Assn. of Insurance Commissioners to bring uniformity to state regulation and supports the Interstate Compact, which will bring efficiency to the product filing process among states participating in it.

Uniform and efficient regulation is crucial to the continued competitiveness of life insurance and to their continued ability to provide vital financial protection products to families and businesses.

Q: Sweeping pension reform legislation is expected to improve retirement security for Americans. What provisions of the bill will help meet the challenges posed by 77 million baby boomers nearing retirement age?

A: The pension bill provides baby boomers with tools that will help them prepare for financially secure retirements. It makes permanent those provisions of a 2001 law that boost savings in 401(k)s, IRAs and similar plans; encourages plan sponsors to offer participants investment advice; permits employers to automatically enroll employees in company-sponsored plans; and creates a new employer-sponsored retirement plan that combines features of traditional defined-benefit and 401(k) plans.

Two key provisions we are especially pleased with will help Americans protect and manage their savings for life. One allows long-term care insurance to be combined with annuities, making long-term care insurance more attractive, available and accessible. The other makes annuities more available through employer-sponsored plans.

Q: In the last several years, speculators and investors have increasingly sought to own, or have an interest in, insurance policies written on the lives of strangers. Would you explain why the ACLI opposes this and what you are doing about it?

A: These speculative uses of life insurance, also known as stranger-owned life insurance, or STOLI, abuse the social purpose of life insurance, circumvent the letter and spirit of insurable interest laws, and threaten the viability of a product that has provided essential financial security to generations of Americans.

We are working with the NAIC and in the states on legislative ways to thwart abusive uses of life insurance. We also are in contact with lawmakers on Capitol Hill to discuss what options may be available at the federal level.

Life insurance is meant to help families and businesses and not speculators looking for an easy buck.