WASHINGTON BUREAU — A U.S. Treasury Department official has told Sen. David Vitter that President Obama intends to nominate the independent Financial Stability Oversight Council (FSOC) member with insurance expertise “soon.”
“I share your determination in making sure the FSOC and Treasury have the benefit of robust insurance experience,” Jeffrey Goldstein, the U.S. Treasury undersecretary for domestic finance, writes in a letter to Vitter, R-La.
Vitter, R-La., is one of the senators who asked the Obama administration in February to move quickly to nominate the independent FSOC member with insurance expertise.
Goldstein notes that the Treasury Department has hired Illinois Insurance Director Michael McRaith to be the first director of the Treasury Department’s new Federal Insurance Office (FIO). As the FIO director, McRaith will be a non-voting member of the FSOC.
The Treasury Department also has created a new insurance advisory panel, the Federal Advisory Committee on Insurance, and reserved half of the seats on the panel for state insurance regulators, Goldstein says.
Through the work of the panel, the FIO and the Treasury Department “will benefit from the deep knowledge and regulatory experience of state insurance regulators, as well as the perspective of industry experts, academics and other stakeholders and affected constituencies,” Goldstein says.
The Dodd-Frank Wall Street Reform and Consumer Protection Act created the FSOC to help U.S. financial services regulators keep tabs on events, trends and companies that could threaten the stability of the U.S. financial system. The FSOC already has started drafting regulations that could affect whether some insurers will be classified as being important enough to the financial system to need extra federal oversight.
The FSOC is supposed to include:
- The heads of the U.S. Treasury Department, the Federal Reserve Board, and other established federal agencies that oversee financial institutions and securities firms.
- The FIO director.
- A representative from the National Association of Insurance Commissioners (NAIC), Kansas City, Mo.
- The independent member with insurance expertise.
U.S. Treasury Secretary Timothy Geithner picked McRaith to be the first FIO director in March, and the NAIC named John Huff of Missouri to represent it on the FSOC back in September 2010. Like the FIO director, the NAIC rep is a non-voting FSOC member.
The independent member will be a voting member and must be confirmed by the Senate.