Insurance companies are currently regulated entirely by state governments. During this congressional session, it is expected that Senators Tim Johnson (D-S.D.) and John E. Sununu (R-N.H.) will cosponsor legislation that would create an optional federal charter for insurance, allowing companies to organize under federal rather than state laws. Advocates of this proposal argue that an optional federal charter would enhance competition and make insurance more affordable, while opponents claim that it would make insurance even harder to obtain for people of modest incomes. This debate over an optional federal charter has drawn considerable attention in the wake of Hurricane Katrina. In many states along the Gulf Coast, homeowners’ insurance premiums have risen dramatically, and many companies have either restricted coverage of--or withdrawn entirely from--certain areas. Although state governments have launched a variety of efforts to make insurance more available, some experts believe that these reforms are unlikely to create a sustainable insurance market. Would this federal legislation create a more competitive market in areas afflicted by natural disasters? Would a more competitive market solve the problems faced today by the Gulf Coast? How might an optional federal charter affect the affordability of insurance in Gulf Coast states? At this AEI conference, cosponsored by the Competitive Enterprise Institute (CEI), panelists will discuss these and other questions.