State insurance regulation will be affected by a few unknown variables in the coming year, including the still-pending FIO report, the NAIC’s new leader and the implementation of new reserving methodology.
1. The FIO report.
The mystery contents of the regulatory modernization report were much awaited by the industry throughout the majority of 2012, even when it appeared it would not be made public until after the Presidential election. While there is plenty to speculate about, only when it is finally issued by the Federal Insurance Office will we have an idea of the FIO’s intent toward a more modern regulatory regime, including whether it intends to act purely as a fact-finding body, or if it will lay the groundwork for more substantive action.
Image: Michael McRaith, Director of the Federal Insurance Office and former Illinois Insurance Director, talks during a news conference at the National Catastrophe Insurance Summmit in Burlingame, Calif., Tuesday, Nov. 15, 2005. (AP Photo/Paul Sakuma)
2. A new leader at the NAIC.
With the retirement of Terri Vaughan, the NAIC is looking for a replacement CEO, to be chosen for his or her ability in Washington, and in staving off federal regulation, and the manner in which the Federal Reserve regulates some insurers under Dodd-Frank Act strictures. This will not be an easy job at a time when the NAIC is commanding a large budget with an ambitious agenda and no small number of critics.
Image: Treasury Secretary Timothy Geithner, right, talks with U.S. Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler, left, as Federal Reserve Chairman Ben Bernanke, center, goes over papers, at the Treasury Department in Washington, Monday, July 18, 2011, before the start of the Financial Stability Council meeting on the one-year anniversary of the Dodd-Frank Reform and Consumer Protection Act. The NAIC will be looking to closely manage how the Federal Reserve regulates some insurers under the Dodd-Frank Act. (AP Photo/Susan Walsh)