Wolin on Dodd-Frank: FIO is Up and Running

WASHINGTON BUREAU — Treasury Undersecretary Neal Wolin says the staff of the new Federal Insurance Office (FIO) already has served an “important consultative role” in connection with issues related to the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Wolin talked about the FIO today during a Senate Banking, Housing and Urban Affairs Committee hearing on implementation of the Dodd-Frank Act systemic risk monitoring provisions.

The Dodd-Frank Act created the Financial Stability Oversight Council (FSOC), an agency that is supposed to help federal regulators identify and react to trends and events that could threaten the stability of the U.S. financial system.

The Dodd-Frank Act also required the Treasury Department to set up the FIO and hire a department employee to be the FIO director.

Michael McRaith, the Illinois insurance commissioner, is supposed to take over as the FIO director June 1.

The FIO staff has helped the Treasury Department with matters such as the Volcker rule and orderly liquidation authority regulations, Wolin said.

The Volcker rule is supposed to keep financial services companies from using taxpayer-backed guarantee programs as an incentive to engage in risky activities; the “orderly liquidation authority” regulations are supposed to give government agencies the authority they need to resolve problems at troubled companies that pose a risk to the financial system.

The FIO has become a provisional member of the International Association of Insurance Supervisors

(IAIS), Basel, Switzerland, and it hopes to become a full member in the fall, Wolin said.

The FIO also is leading the U.S. delegation on the insurance and pensions committee at the Organization for Economic Co-operation and Development, Paris, Wolin said.