WASHINGTON BUREAU — Financial Stability Oversight Council policies lead to insurance industry interests being inadequately represented at the FSOC, a National Association of Insurance Commissioners official today told a congressional panel.
The U.S. Treasury Department, the parent of the FSOC, has taken “a very narrow and, in my opinion and the NAIC’s opinion, incorrect view” of the Dodd-Frank Wall Street Reform and Consumer Protection Act provision that established the FSOC, John Huff testified at a hearing of the House Financial Services Committee oversight subcommittee on the role and actions of the FSOC.
The FSOC is supposed to coordinate efforts to protect the stability of the U.S. financial system.
Huff, the Missouri insurance director, is the NAIC’s representative on the FSOC. He participates in FSOC proceedings as a non-voting member.
Huff said he has been restricted from consulting with fellow state insurance regulators on matters before FSOC.
That restriction “contradicts congressional intent and the deference accorded to state insurance regulators in the explicit language” of Dodd-Frank itself, Huff said.
“But, most importantly, it contradicts logic and reason,” Huff testified. “Quite simply, FSOC should want – and the U.S. taxpayers should demand – all the regulatory resources and expertise that their
regulators can provide to FSOC’s important work in protecting the U.S. financial system.”
Huff said he and Therese Vaughan, the NAIC’s chief executive officer, “sent a public letter to Treasury Secretary [Timothy] Geithner asking for him to rectify this issue.”