At a hearing before the House Financial Services Committee oversight subcommittee on the role and actions of the Financial Stability Oversight Council (FSOC) on Thursday, John Huff, Missouri’s director of insurance and a representative of the National Association of Insurance Commissioners (NAIC), voiced discontent with representation on the council for the industry.
Testimony by others commented on scrupulous attention to the need to discuss any potential actions and to consider input from other agencies and the public in the FSOC’s mission to protect the public from another financial crisis.
But Huff said that not only has he been prevented from representing the state insurance regulatory system rather than just the state of Missouri, a restriction that he says “defies logic and reason,” but currently he is the only representative of the industry seated and able to take part in proceedings regarding insurance.
Three representatives from the industry are called for on the FSOC, and while Michael McRaith, director of insurance for Illinois, has been appointed to serve as head of the new Federal Office of Insurance (FOI) and thus on the FSOC, he does not take up that position until June.
In the meantime, said Huff, the “furious pace” of the work the council is engaged in prevents adequate consideration of the needs of the insurance industry. In addition, the lack of a voting council member to represent the industry is a serious impediment to the work that must be done. (There is only one seat on the FSOC for a voting representative of the insurance industry; the positions that Huff and McRaith occupy are nonvoting, and the voting member has not yet been appointed.)
Testimony at the hearing was also presented by representatives from the Treasury Department, the Commodity Futures Trading Commission, the Federal Reserve Board, the Securities and Exchange Commission, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency.