Trade groups representing large insurers are urging the Treasury Department to ensure that the Federal Insurance Office (FIO) play a strong role in representing the U.S. on global insurance issues.
“We believe there is an important role for the federal government with regard to insurance and reinsurance,” the letter said.
The letter also asks that the Obama administration appoint someone to head the office “who has the experience and stature necessary to carry out the portfolio that Congress has enumerated for the FIO.” The office was created under the recently enacted financial services reform bill.
Although the Obama administration has not indicated whom it will name to the post, industry officials believe that a primary candidate is Michael McRaith, Illinois insurance commissioner.
In a letter to the Treasury Department sent this week, the coalition also demanded “active engagement” with the large domestic and foreign insurers and reinsurers they represent in drafting the reports the FIO is mandated to make to Congress on insurance issues.
These issues include proposing ways regulation of the U.S. insurance industry can be improved and another “on the breadth and scope of the global reinsurance market and the critical role the market plays in supporting insurance in the U.S.”
The letter also said that “making sure these reports incorporate industry input and provide objective analysis of these respective issues is key.”
Those signing the letter include the American Council of Life Insurers; the American Insurance Association; the Association of Bermuda Insurers & Reinsurers; the Council of Insurance Agents & Brokers; the Financial Services Roundtable; and the Reinsurance Association of America.
Another signer is the Risk and Insurance Management Society Inc., which represents commercial and municipal purchasers of insurance products.
On the FIO’s role, the trade groups said it is their view that Congress intended that “the U.S. will, for the first time, be able to speak with one voice internationally and effectuate international recognition agreements with foreign nations on prudential insurance measures on an equal footing. This authority should be utilized to ensure equitable treatment for domestic and foreign insurers and reinsurers alike, promote job creation and foster innovation and growth in the U.S. markets.”
The letter also asks that the new agency use caution in demanding data on insurance industry activities from specific insurers.
The FIO should coordinate with the Office of Financial Research and uses available data from existing regulatory and non-regulatory sources such as the National Association of Insurance Commissioners “to avoid unnecessary and duplicative reporting burdens on companies,” the letter said.
It is also important to assure that confidential company information shared with the FIO not be disclosed publicly, the letter added.