At an insurance conference last week, Allstate Corp.’s investor relations chief was giving a rundown of how many states sell certain products. Your Choice Home is in 15 states, and Your Choice Auto is in 48 states, Robert Block said.

No, “46 states,” he clarified a moment later.

Who can blame the guy for getting his numbers jumbled?

For more than 135 years, insurers largely have been regulated on a state-by-state basis. But that system could get shaken up under a Treasury Department proposal officially unveiled Monday that would give individual companies the choice of being regulated primarily by the U.S. government or of continuing to be regulated by individual states.

Supporters of so-called optional federal charters argue that, because they often do business nationwide, the process of getting, say, 50 different approvals for the same product is burdensome.

But state watchdogs also have concerns. They believe consumers could be hurt by what they think could be a weaker regulatory structure at the federal level.

Allstate, for one, said it is “encouraged” by the Bush administration’s proposal.   (In Nebraska, Allstate owns Lincoln Benefit Life.)

“If done correctly, a federal insurance-regulatory system could reduce costs by eliminating inefficiencies, streamline the process of making new products available to consumers and ensure a consistent level of consumer protection in each of the 50 states,” Allstate spokesman Rich Halberg said.

But the National Association of Insurance Commissioners, which represents the state regulators, doesn’t like the idea.  Nor does Nebraska’s commissioner, Ann Frohman. 

“My position parallels NAIC,” Frohman said.  “It’s great to start the dialogue.  The proposal of having an optional system isn’t good for the citizens of Nebraska or consumers anywhere.

“Because Number 1, we’re already doing the job,” Frohman said.  “It’s not perfect, but  Number 2 it’s going to be expensive. 

“It’s at the option of the company. They choose a federal or state charter.  That doesn’t put consumers first.  How can it?”

Illinois’ top insurance watchdog said the move to an optional federal charter amounts to industry deregulation would be to the detriment of consumers.

“It’s no surprise that the Bush administration comes out with an exclusively pro-business proposition,” said Michael McRaith, insurance director for the Illinois Department of Financial and Professional Regulation. “Very large, wealthy companies would get to choose the lesser level of regulations.

“It’s important to remember that insurance is not about companies but about consumers, like a single mom working two jobs to pay for child care who gets into an auto accident. Do we want her to have to call the federal government to make sure she gets her claim paid?”

Optional federal chartering is only one element of a massive overhaul of the U.S. financial services industry proposed by Treasury Secretary Henry Paulson. The restructuring would touch every institution, from investment banks to mortgage brokers.

No one expects changes to occur overnight. The Treasury Department acknowledged that the debate in Congress over optional federal charter bills has been “difficult and ongoing.”

Allstate’s biggest rival, Bloomington, Ill.-based State Farm, also supports Paulson’s call for optional federal charters.

Under the state-based structure, rates of automobile and homeowners insurance often are regulated.

“While numerous arguments have been made to justify such rate regulation, they are unpersuasive, especially since several states leave insurers largely free to set their own rates,” the Treasury report said.

Paulson’s proposal fails to recognize that the current system has largely protected consumers and ensured industry soundness, said Robert Rusbuldt, chief executive of the Independent Insurance Agents & Brokers of America. Along with the National Association of Mutual Insurance Cos., which represents smaller insurers, it is among the groups down on the plan.

“While the Treasury’s recommendation doesn’t come as a surprise, since they would become the new federal insurance regulator, proposing a massive overhaul of insurance regulation when the insurance market is one of the few stable sectors in the financial-services industry seems odd,” Rusbuldt said in a statement.