The National Association of Insurance Commissioners wants to have a voice in the Financial Stability Board, an international group which seeks to promote creation of uniform regulatory oversight policies for financial firms.
Currently, only the Federal Reserve Board, the Securities and Exchange Commission and the Treasury Department represent the U.S. with the FSB.
The NAIC’s views were voiced in a letter to those agencies signed by Adam Hamm, NAIC president and North Dakota Insurance Commissioner.
Hamm said in the letter that because the FSB is increasingly driving international standard-setting beyond its primary focus on financial stability, its work has the potential to impact the U.S. insurance sector.
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Hamm said the NAIC is seeking “to strengthen U.S. participation” in the FSB by “directly providing our insurance expertise and regulatory perspective to these important discussions that will have import for the companies we regulate.” The letter was addressed to Daniel K. Tarullo, Governor of the Federal Reserve Board; Mary Jo White, Chair of the Securities and Exchange Commission; and Marisa Lago, Assistant Secretary, Department of the Treasury.
Hamm said that to illustrate the far-reaching implications of FSB discussions as they relate to regulated companies, he wanted to point out that the U.S. insurance market represents one-third of the total insurance market worldwide.
“If FSB proposals are to be relevant and considered for integration into the U.S. regulatory regime where appropriate, then U.S. participation in FSB discussions should reflect our unique regulatory structure and not be hampered by arbitrary limitations and seat assignments that place the U.S. at a disadvantage relative to more consolidated regulatory regimes,” Hamm said.
The letter also pointed to examples of FSB working groups that directly impact insurance regulation, such as the Standing Committee on Supervisory and Regulatory Cooperation, which deals with systemic risk and group supervision issues, and the Insurance Cross Border Crisis Management Group under the Resolution Steering Group.
The FSB has been established to coordinate the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies.
The FSB is now headed by Mark Carney, Governor of the Bank of England and is headquartered in Basle, Switzerland, at the offices of the Bank for International Settlements.
Besides central bankers and government agencies, its members include money center financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts.
The National Association of Insurance Commissioners and the National Conference of Insurance Legislators are independently moving to develop uniform guidance for insurance companies caught up in the aggressive efforts by state insurance agencies and treasurers to recoup funds from unclaimed death benefits in life insurance policies.
The NCOIL effort is aimed at further updating a model law it crafted in 2011 and has now been adopted by nine states and is being debated by legislatures in nine other states, according to a Legal Alert by Sutherland, Asbill & Brennan.