As we have reported throughout the year, when the Federal Insurance Office (FIO) was created, one of their first assignments was to conduct a study on insurance regulation.
The Treasury Department, who oversees the FIO, made a request for public comment. Specifically they are seeking input on how to improve and modernize the insurance regulatory system in the United States for a study the FIO is required to conduct under the Dodd-Frank Act.
The Treasury request poses a series of sixteen questions, which touch on subjects such as capital standards, consumer protections, regulatory uniformity and the potential costs of a federal regulatory system.
The FIO was created under Dodd-Frank with two specific purposes: to provide expertise on the insurance industry for the Administration and Congress, and to assist in international trade negotiations. The law explicitly bars the FIO from serving in a regulatory capacity, but NAMIC has warned that this study, particularly as it’s conducted by the FIO, could serve as a vehicle for the Office to expand beyond its intended role. Any such expansion would be likely to lead to new duplicative and costly federal regulations.
NAMIC, working closely with our internal policy committees, will offer comments outlining how the state-based regulatory system - while not perfect – helped protect consumers and ensure stability during the financial crisis, and that the creation of a federal regulator would add burdensome, duplicative regulations and excessive costs for insurers and their policyholders.
Comments must be submitted by December 16. The Federal Insurance Office is required to submit its study to Congress no later than January 21, 2012. Additionally, FIO Director Michael McRaith will appear before a House Financial services Subcommittee on Tuesday, October 25, to discuss how insurance oversight affects consumers and businesses. NAMIC will send an update after this hearing.
Contact: Jimi Grande
Senior Vice President
Federal and Political Affairs
Posted: Tuesday, October 18, 2011 4:00:33 PM. Modified: Tuesday, October 18, 2011 4:04:31 PM.
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