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June 27, 2011 at 08:00 PM
Consumer advocates are questioning whether the Treasury Department should include an actuary as a member of the proposed Federal Advisory Committee on Insurance, citing a potential conflict of interest, among other concerns.
In the letter, Consumer Federation of American officials particularly cited a recent letter to Congress by the American Academy of Actuaries regarding flood insurance legislation, without disclosing that the actuary who wrote the letter is employed by a reinsurer.
In a letter to the Treasury Department, J. Robert Hunter, director of insurance for the Consumer Federation of America, said, “I do not agree that actuaries need to be on the FACI.” He added this is not to say that actuarial expertise “is not needed in your work–it is.”
However, Hunter said, “actuarial expertise is much more suited for subcommittee or staff functional work, for getting into the details under the direction of the members of FACI, than in determining public policy.”
Furthermore, Hunter urged Treasury officials to be “very careful when selecting actuaries for such a purpose.”
He said the “vast majority of actuaries are in the employ, directly or indirectly, of the insurance industry and have a direct conflict-of-interest when making independent decisions.”
Hunter wrote his letter to Jeffrey Goldstein, undersecretary of the Treasury for Finance.
The letter was in response to a June 8 letter to Goldstein by officials of the American Academy of Actuaries, asking that an actuary with insurance expertise be appointed to FACI.
The Treasury Department in a May 13 Federal Register notice asked people to apply to be members of the FACI.
