The Federal Advisory Committee on Insurance (FACI) is meeting Aug. 6 to explore international issues. Some of the topics of discussion will include the work that is to be done on addressing how the insurance industry can serve and address global demographic changes spurred by the aging of the middle class, a subject that was identified at the first meeting in March by Federal Insurance Office (FIO) Director Michael McRaith.
The immediate priority of FACI appears to be a market-focused international supervision, reflecting McRaith’s current priorities for the FIO, as he has stated in Congressional testimony May 17 when he said that the FIO’s immediate predominant focus is on international issues.
The first new business item on the agenda is a presentation and discussion regarding the internationalization of the insurance industry, to be delivered by Mike Pritula of consultancy McKinsey & Co. The meeting will take place in the U.S. Treasury building’s Cash Room in Washington at 1:30 pm Monday.
McRaith cited in his May 17th testimony before the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity on “U.S. Insurance Sector: International Competitiveness and Jobs” a recent McKinsey study that showed that insurers, including U.S.-based insurers, are now generating almost 33% of premium volume from outside the insurers’ home countries.
This will be followed by a discussion on international regulatory activities, discussing the work of the International Association of Insurance Supervisors (IAIS), the Financial Stability Committee and the work done by U.S. and global counterparts on ComFrame, or the Common Framework for the designation of internationally active insurance groups.
The FIO provides a single point of contact and voice for the United States on prudential aspects of international insurance matters which will expand its engagement on international insurance matters and develop federal policy on these issues.
Another big focus for McRaith and FACI will be the European Union-U.S. dialogue, which McRaith has been trying to repair and revive.
“As an alternative to either or both jurisdictions entering into unilateral equivalence exercises, the FIO initiated an EU – U.S. insurance dialogue because the insurance industry based on both sides of the Atlantic needs greater clarity and certainty as to regulatory expectations and capital requirements,” McRaith testified in May. He said the parties have committed to bring these discussions to conclusion by December 2012, so expect a hefty progress report.