WASHINGTON BUREAU — Roy Woodall, the Obama administration nominee to be the independent member with insurance expertise on the new Financial Stability Oversight Council, vowed today at a confirmation hearing to “vote his conscience” once he is a member of the new agency.
He also told members of the Senate Banking, Housing and Urban Affairs Committee, “Insurance is in my blood.”
Woodall said his grandfather, C.A. Woodall, started selling insurance from a mule-drawn wagon in 1904 and continued to be a leading insurance producer in Western Kentucky for over 50 years.
“My father, Roy Woodall Sr., started his own general agency in Paducah, Ky., in the 1920s and ran it until he retired in 1973,” Woodall said.
In addition to being a lawyer and a former Kentucky insurance commissioner, Woodall is a past president of the National Association of Life Companies. He also has been chief counsel for state relations at the American Council of Life Insurers, Washington. He later worked as an insurance specialist at the Congressional Research Service and the U.S. Treasury Department.
Insurance trade groups are calling for prompt confirmation of Woodall.
Banking Committee policy is for nominees to get a week to respond to written questions asked by committee members. The Senate is scheduled to adjourn for a month-long recess Aug. 8.
At the confirmation hearing, Woodall received a warm welcome from members of the committee. Sen. Tim Johnson, D-S.D., the chairman, opened the hearing by saying that he was pleased to consider Woodall’s nomination. “AIG showed us how interconnected the insurance industry is with the health of our economy, and I am sure Woodall’s contribution as an FSOC member will be invaluable,” Johnson said.
Sen. Richard Shelby, R-Ala., the highest ranking Republican member of the committee, brought up AIG while questioning Woodall.
Shelby talked about the role that AIG played in the 2008 financial crisis and asked whether insurance companies should be considered a systemic risk.
Woodall said insurance companies should be evaluated for being systemically risky on a case-by-case basis.
Woodall added that he does not think AIG was representative of the insurance industry as a whole. “It’s only when insurance companies go beyond the traditional business model that they get in trouble,” Woodall said.
During the hearing, Woodall said in response to a question that he does not believe that an insurance company involved in traditional insurance activities is likely to constitute a potential systemic risk.
Whether a company is likely to be a threat to the financial system is the test the FSOC will use to determine whether a non-bank financial firm should be subject to federal oversight.