Federal Insurance Office Seeks Public Input on National Insurance Regulatory Reform Issues for Upcoming Dodd-Frank Congressional Report; Comment Deadline is December 16, 2011

The United States Department of the Treasury’s Federal Insurance Office (“FIO”) announced today, October 17, 2011, that it is seeking public comment to assist in the creation of its report to Congress on how to modernize and improve the nation’s insurance regulatory system.  This report, which is expected to be completed in early 2012, is required under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

The FIO is asking that comments on the following topics be submitted by December 16, 2011: 

• Systemic risk regulation with respect to insurance;
• Capital standards and the relationship between capital allocation and liabilities, including standards relating to liquidity and duration risk;
• Consumer protection for insurance products and practices, including gaps in State regulation and access by traditionally underserved communities and consumers, minorities, and low and moderate-income persons to affordable insurance products;
• The degree of national uniformity of State insurance regulation, including the identification of, and methods for assessing, excessive, duplicative or outdated insurance regulation or regulatory licensing process;
• The regulation of insurance companies and affiliates on a consolidated basis;
• International coordination of insurance regulation;
• The costs and benefits of potential Federal regulation of insurance across various lines of insurance (except health insurance);
• The feasibility of regulating only certain lines of insurance at the Federal level, while leaving other lines of insurance to be regulated at the State level;
• The ability of any potential Federal regulation or Federal regulators to eliminate or minimize regulatory arbitrage;
• The impact that developments in the regulation of insurance in foreign jurisdictions might have on the potential Federal regulation of insurance;
• The ability of any potential Federal regulation or Federal regulator to provide robust consumer protection for policyholders; and
• The potential consequences of subjecting insurance companies to a Federal resolution authority, including the effects of any Federal resolution authority:
  • On the operation of State insurance guaranty fund systems, including the loss of guaranty fund coverage if an insurance company is subject to a Federal resolution authority;
  • On policyholder protection, including the loss of the priority status of policyholder claims over other unsecured general creditor claims;
  • In the case of life insurance companies, on the loss of the special status of separate account assets and separate account liabilities; and
  • On the international competiveness of insurance companies

To view the Federal Register Notice, which also contains submission contact information, click here. 

A news release issued by the Treasury Department is reprinted below.

Should you have any questions or comments, please contact Colodny Fass.

Federal Insurance Office Seeks Comments on How to Modernize, Improve Insurance Regulation

WASHINGTON – The Treasury Department’s Federal Insurance Office today announced that it is seeking public comment for its report, mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, on how to modernize and improve the country’s insurance regulatory system. The Federal Register Notice published today seeks comments from policyholders, experts, consumer groups, state insurance regulators, insurance industry representatives and all other interested parties.  

The Federal Insurance Office monitors all aspects of the insurance industry, including identifying issues contributing to systemic risk.  The Federal Insurance Office also monitors the availability and affordability of insurance to traditionally underserved populations; advises the Secretary on major domestic insurance policy issues; and develops and coordinates federal policy on international insurance regulatory matters.

To view the notice, click here.

The comment period closes 60 days after the Notice’s date of publication in the Federal Register.

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