by: Kevin Drawbaugh and John Poirier

The Obama administration gave a briefing on financial regulation reform to insurance lobbyists on Thursday evening amid some expectations that a plan for national oversight of the industry is in the works.

The administration has held a series of closed-door briefings for lobbyists in recent weeks on its ambitious agenda to tighten the rules for banks and financial firms at a time when a severe capital crisis is rocking economies worldwide.

The officials at Thursday's session did not give a clear signal about their intentions on insurance, said sources familiar with discussions at the meeting.

The administration so far has not made rewriting the rules for insurers a high priority on its reform agenda.

One source said that Treasury Department officials at a meeting earlier this week indicated they plan to recommend an optional federal charter approach to insurance, but had not settled on which segments of the U.S. industry to include.

The nation's 6,000 insurers have been divided for years on the issue of national oversight. They are presently regulated by state and territorial governments.

Disagreement among industry lobbyists on the issue bubbled up at the Thursday briefing, said the sources.

One source described it as ''a big food fight,'' with administration officials listening attentively to both sides.

Within the industry, life insurers and large property-casualty insurers tend to support national regulation, which would save them money because they would not have to comply with more than 50 different government rulebooks.

But smaller property-casualty insurers, state regulators and some other sectors of the industry like the system the way it is and oppose centralizing oversight in Washington, D.C.

Some consumer activists warn that federal regulation could lead to higher insurance rates and weaker consumer protection.

Representative Barney Frank, chairman of the House Financial Services Committee, has said allowing only life insurers to opt for federal oversight might be one option.

Another incremental step that has been studied would be establishing a federal office of insurance information. Data on nationwide insurance markets is in short supply, a cause of frustration for lawmakers and industry authorities overseas.

Major insurers such as Allstate Corp (ALL.N), Travelers Cos Inc (TRV.N), Nationwide [NMUIC.UL] and many others have a stake in the outcome of the debate.

Aside from insurance, a financial industry representative said officials floated three approaches to beefing up consumer protection, without revealing a strong preference for any one.

The first would be to strip many of the agencies -- including the Federal Reserve and the Securities and Exchange Commission -- of their consumer protection responsibilities and house them in a new agency that would become a ''financial products safety commission.'' Legislation along these lines has been introduced.

The second idea would be to allow the agencies to keep their investor protection roles, but have a new agency that provides general oversight to support their roles.

The third approach would be to not create a new agency, but beef up the enforcement powers and visibility of the existing agencies' investor protection roles. (Additional reporting by Karey Wutkowski, Patrick Rucker and Rachelle Younglai; Editing by Andrea Ricci)