The National Association of Insurance Commissioners (NAIC) is warning against “mission creep” from the federal government, including the Federal Office of Insurance (FIO).
FIO and the NAIC each must remain in their own lane of traffic – FIO must do its own job, “not our job,” said NAIC CEO and former U.S. Sen. Ben Nelson in remarks before state legislators today in Washington.
Nelson spoke to the National Conference of Insurance Legislators (NCOIL) about the importance of all parties playing their role, and cooperating and collaborating as needed.
Both the NAIC and its state regulators, as well as FIO, will serve as the voice for the United States internationally, he said, despite the fact some international supervisors would wish the U.S. have one voice, he said.
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Nelson said to reporters later that the NAIC and FIO are engaged in periodic conference calls, which could become formalized, with updates on what FIO is working on internationally.
Nelson said it was important to let people know that FIO is not “step one” in federal insurance regulation in remarks afterward.
FIO’s role internationally is on trade, and it should pursue that to create more jobs here at home and in South America, Nelson said.
It will have to work it out with the United States Trade Representative’s office (USTR), Nelson said. FIO probably shares a “dual lane with the USTR on trade issues,” he said.
FIO is “beginning to understand” that it is not a regulator, Nelson added.
FIO’s Federal Advisory Committee on Insurance (FACI) is meeting at the U.S. Treasury building March 13 where it will hear a broad subcommittee report on Affordability and Availability and the effect of global implications of demographic changes like growing middle class and aging populations – and how the U.S. has not kept pace with these changes, some FACI members feel.
The subcommittee surmised that affordability for U.S. consumers could be negatively impacted by capital requirements imposed on European Union reinsurers, who provide excess lines and catastrophe coverage, under Solvency 2.
Since domestic insurers rely heavily on EU-based professional reinsurers for excess and catastrophe coverage, capital requirements imposed by international regulators could ultimately impact costs to U.S. consumers.