A House Financial Services Committee subcommittee, under pressure from domestic insurance interests, is expected to demand that Federal Insurance Office Director Michael McRaith pressure European regulators to bend policy more to the liking of U.S. insurers.
The June 13 Housing and Insurance Subcommittee hearing comes as the International Association of Insurance Supervisors prepares its final list of global systemically important insurers, and lawmakers will also ask what U.S. governance representatives are doing to shield U.S. insurers from being designated as globally systemically important insurers.
Back in late March, FSC Subcommittee Chairman on Housing and Insurance, Rep. Randy Neugebauer, R-Texas, told McRaith that current international standard-setting proposals could impose unnecessary costs on insurance consumers and hurt the competitive U.S. marketplace.
Insurers have expressed concerns that McRaith is not using his voice abroad to fend off unwanted advances from European financial regulators who may prefer to impose capital standards on insurers that do business globally.
The questions McRaith is likely to face are based on a briefing about 15 to 20 committee staffers had last Wednesday with representatives of insurance and reinsurance trade groups, such as the American Insurance Association, the Reinsurance Association of America (RAA), Property Casualty Insurers Association of America (PCI), the National Association of Mutual Insurance Companies and the American Council of Life Insurers (ACLI).
The briefing, though, contends that the government entities represent the industry, not the government, and the Dodd-Frank Act does not support such an assertion.
In the June 10 briefing memo to the subcommittee members, the majority staff characterize the FIO director’s job as “representing the interests of U.S. insurers during the negotiation of international agreements and advising the Office of the U.S. Trade Representative (USTR) during trade negotiations.”
And the jobs of the three FSOC insurance members are described as representing “the perspective of the insurance industry” under the requirements of the Dodd-Frank Act.
This wording, though, is not found in Title One of the Dodd-Frank Act describing FSOC’s duties.