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NCOIL Says Snub of State Legislators May Be Sign of FIO “Mission Creep”

Leaders of the National Conference of Insurance Legislators (NCOIL) have expressed frustration that the makeup of the Federal Advisory Committee on Insurance (FACI) formed by Treasury is missing a key perspective—that of a state lawmaker
November 9, 2011

Leaders of the National Conference of Insurance Legislators (NCOIL) have expressed frustration that the makeup of the Federal Advisory Committee on Insurance (FACI) formed by Treasury is missing a key perspective—that of a state lawmaker. Rep. George Keiser (ND), NCOIL president, said, “I am disappointed in the FACI selection process. The committee is overrepresented by regulators at the expense of legislators.”

Keiser, a Republican, applied to serve on the committee in June. Rhode Island Rep. Brian Kennedy, a former NCOIL president, said lawmakers thought if they stood behind one candidate, they would make the best case for having their interests represented, saying. “NCOIL is nonplussed that FACI composition does not acknowledge legislative expertise,” he said. Kennedy, a Democrat, blamed a poor relationship between FIO Director Michael McRaith and state lawmakers, dating to clashes during McRaith’s time as Illinois insurance director, for legislators being left off the list.

The U.S. Treasury Department announced appointments to the 15-member panel November 4. It includes seven state commissioners, five insurance executives, one agency leader, a consumer advocate and an academic. The FACI will advise the new Federal Insurance Office (FIO), the Financial Stability Oversight Council (FSOC) and other entities on insurance regulation, systemic risk concerns in regards to the insurance industry and related issues.

Incoming NCOIL President Sen. Carroll Leavell (NM) went on to say, “I question the rationale of those who have chosen to ignore legislative experience in a group that is supposed to reflect national insurance expertise. This again raises concerns voiced by legislators that FIO may be subject to mission creep and could suggest a yet greater and unwarranted federal involvement in insurance.”

What It Means to Agents: PIA shares NCOIL’s frustration that state insurance legislators have been shut out of the Federal Advisory Committee on Insurance. This only heightens the concerns PIA has been expressing for more than a year that – despite the restrictions placed on it by Congress – the FIO, if left unchecked, will attempt to become a federal insurance regulator.

Read more on NCOIL's push for voice on federal panel: New Federal Advisory Committee Missing Vital Component (NCOIL 11/4/11)