As part of Title V of the Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law on July 21, 2010 the Federal Insurance Office (FIO) is a new agency within the Department of Treasury. This office was designed to provide expertise at the Federal Level since, currently, all insurance regulation and enforcement is governed state by state.
On January 21st, the FIO is expected to issue a comprehensive report to Congress on how to modernize and improve the insurance regulatory system in the U.S. This report comes after months long solicitation for comments from the public. The FIO report was required by the tenants of the Dodd-Frank Act 18 months after the law’s enactment. The FIO Director stated that over 150 comments had been received to date. These comments were not only received via the formal public solicitation. Dozens of meetings also took place between the FIO and various parties including consumer advocates, insurance industry representatives, agents/brokers and state government associations as well as academics. We have provided links below for the Federal Register and the comment letter posted by the Risk and Insurance Management Society (RIMS).
This is a landmark step for the Federal Government, and we are following these developments closely, as the direction the Fed takes in shifting insurance regulation & control to the Federal from the state level, could be a major change for the industry. We would anticipate there will be many divergent, insistent and innovative views when the Federal Insurance Office’s report has been released. Our intent is to keep you apprised of these comments and summarize any distinct or key parts of them.
As an independent insurance and risk management advisor, we feel that many states are ill equipped to regulate insurers. Given budgetary pressures and staffing challenges many states simply lack the necessary resources. While we are a believer and supporter of states having ultimate say about insurance matters, we think regulatory oversight and enforcement by the Federal Government may allow for a more consistent approach for large multinational carriers.
To read RIMS’ letter to the US Dept. of the Treasury, please click [here].
To read the Federal Register, please click here [here].
