Life insurance industry groups are celebrating the idea that Thomas Workman could be the next “member of the Financial Stability Oversight Council with insurance expertise.”
President Donald Trump announced the Workman nomination Wednesday.
Workman, a lawyer, served as president of the Life Insurance Council of New York, a trade group, from 1999 through 2016. He has a bachelor’s degree and a law degree from Ohio State University, and he was a captain in the U.S. Army Judge Advocate General Corps from 1970 through 1973.
If confirmed to the FSOC post by the Senate, Workman could be the official with the most ability to talk as a peer with the top U.S. banking and securities regulators.
Workman would succeed Roy Woodall, a former Kentucky insurance commissioner.
Drafters of the Dodd-Frank Act created FSOC in response to the wave of mortgage loan defaults, and the resulting credit default swaps meltdown, that led to the Great Recession.
FSOC is supposed to monitor the entire economy for problems that could hurt the U.S. financial system. It can designate important entities other than banks as “systemically important financial institutions,” or SIFIs. Regulators may then impose extra restrictions and reporting requirements on the SIFIs.
Most of the FSOC members are heads of major federal financial services regulatory bodies, such as the Federal Reserve system.
Because no federal agency oversees insurance, Dodd-Frank drafters created an FSOC seat for a “member with insurance expertise” to give FSOC the ability to identify and understand possible sources of systemic risk related to insurance.
FSOC has designated several large life insurers as SIFIs. Life insurers have argued that FSOC uses an unfair, opaque system to choose SIFIs, and that FSOC has offered no clear way for life insurers to escape from SIFI status.
Mary Griffin, the current president of LICONY, put out a statement congratulating Workman.
“There is no doubt that his deep experience in the life insurance industry and wise judgment will serve him well in this new role,” she said.
Dirk Kempthorne, the president of the American Council of Life Insurers, is also welcoming the idea that the new FSOC insurance will be someone with extensive life insurance industry experience.
Kempthorne said he hopes Workman will help keep FSOC from designating life insurers as systemically important.
Daniel Rabinowitz, a partner at Kramer Levin who has worked with Workman on the New York City Bar insurance law committee, said in a commentary on the nomination that Workman “sincerely believes in the value that insurance can bring to consumers — peace of mind and protection from risk — and has always been focused on making sure the insurance industry is aligned with that.”
At FSOC, Workman “will be a voice of pragmatism and experience,” Rabinowitz said.
CORRECTION: An earlier version of this story described the career of Roy Woodall incorrectly. He has been an insurance commissioner in Kentucky.
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