Insurance representatives today agreed at a Washington conference that the new Federal Insurance Office (FIO) is an “important single point of contact” at the federal level on insurance issues, especially international ones.
But at a conference of “Insurance Regulation in the United States: Modernization and Improvement,” insurance representatives sitting on three separate panels failed to provide a consensus on what the role of the FIO should be in insurance regulation, and both praised and criticized state regulation.
The conference was convened by the Treasury Department, and chaired by Michael McRaith, FIO director.
The conference was aimed at gaining industry views in advance of a report on insurance modernization that the Treasury must provide by late January.
McRaith cautioned after the hearing that the FIO will meet the deadline, but that the first report will cover only the most important points.
He said, “we intend to be prolific” by providing reports on relevant issues going forward.
Transparency in financial statements and in dealing with consumers was discussed by a number of those who testified at the hearing, and McRaith indicated that it will be one topic covered in the report that DFA mandates be produced by late January.
At its start, Neil Wolin, deputy Treasury secretary, said that before the Dodd-frank Act was passed, there was “no institutional capacity to examine insurance at the federal level.”
He said that, “to be clear regulating the insurance industry is not the job of FIO. The states are.” He said FIO’s advisory role is working, and that the FIO will continue to work closely with state regulators to provide the federal perspective.
Wolin said, “We are reaching out in a variety of ways through an outreach process.” He said the FIO will continue to okay an important role in Financial Stability Oversight Council and the International Association of Insurance Supervisors.
The most dramatic moment at the conference was the comment by Walter Bell, chairman of Swiss Re, the Americas.
He said that Solvency II, the European-led effort for uniform capital standards, “is going to happen in Europe, whether it is in six months or a year,” Bell said.
“And it is going to cost us companies,” he stated. Bell said, “There has to be global supervision” because the “world is too small.”
The problem, he said, is “understanding what the regime is.”
Brian Duperreault, CEO of Marsh, Inc., said one role the FIO could play is to help open up protectionist regimes, for example, what happened in the Brazilian insurance markets.
Christopher Mansfield, general counsel of Liberty Mutual, Boston, said, “We welcome the FIO as our federal single point of contact.”