FIO releases first annual report

NAMIC added that the report also highlights the work being done around the world to improve the efficiency and coordination of insurance regulation, which NAMIC believes should be carefully monitored to avoid a negative impact on the healthy and competitive U.S. property/casualty insurance market.”  

Moreover, the NAMIC statement said that, “As FIO finalizes its report on regulatory modernization for the insurance industry, we hope it will keep the findings of this annual report in mind, and take a cautious approach in recommending changes to a system that has enabled the property/casualty insurance industry to protect consumers through these difficult times.”

The FIO did not comment on whether the report it released today was the modernization report mandated by DFA.

This report was mandated under the Dodd-Frank Act, and was supposed to be released to Congress more than a year ago. 

Wood said he believes that, “While it is clear that FIO Director Mike McRaith and his team have had an underlying report (and subsequent revisions) for a considerable length of time, the delay in its release is reflective of the reality that the U.S. Treasury Department has not historically or culturally been focused on issues regarding the insurance industry.”

He noted that, “Several members of Congress have loudly complained about the delay, creating some minor buzz and anticipation among we professional insurance lobbyists and observers.” 

In a statement in advance of the hearing, the American Council of Life Insurers said that, “the significant role that life insurers play in the U.S. and global economy is dependent on an efficient regulatory structure.

“We urge that our state regulators and the FIO coordinate closely and cooperate continuously to promote efficient and effective supervision, with due regard to limitations under current U.S. state and federal laws,” said Kimberly Olson Dorgan, ACLI senior vice president, public policy.

“We believe that both FIO and our state regulators must work together to assure that U.S. competitive interests are represented on par with those of our global competitors, FIO from within the U.S. government and our state regulators as participants in supervisory colleges” Dorgan said. “We support their collective efforts, as we believe close coordination and continuous cooperation on that point, both at home and abroad, is essential.”

The American Council of Life Insurers said the report “represents an important contribution to the information base on this vital segment of the U.S. economy. As it relates specifically to the life insurers, the report demonstrates FIO’s understanding and recognition of the financial strength of the industry and key economic issues affecting it.”

ACLI felt the report was on target in identifying the low interest rate environment as a challenge to the industry, and changing demographics and growth opportunities in emerging markets representing industry trends.

“Life insurers believe they will play an even greater role in the lives of American families, especially in connection with aging Baby Boomers who are seeking financial security in retirement,” ACLI said. “For more than 200 years, life insurers have been providing financial and retirement security to American families. Life insurers look forward to doing the same globally.”

However, in the CIAB statement, Wood told his members that, “The CIAB believes it is essential that the U.S. insurance regulatory system needs to speak with a single voice in critical international negotiations, and believes the FIO has a critical and leading role in asserting the interests of the U.S. insurance system.”