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FIO Continues to Say It’s Not a Regulator

Some of the Treasury Department’s top brass reaffirmed the place of state regulators in overseeing the insurance industry at the Federal Insurance Office’s first conference addressing insurance regulation
November 13, 2011

Some of the Treasury Department’s top brass reaffirmed the place of state regulators in overseeing the insurance industry at the Federal Insurance Office’s first conference addressing insurance regulation. The conference was held December 9 held in the Cash Room in the main Treasury building in downtown Washington, D.C. PIA National attended at the invitation of the FIO.

Deputy Treasury Secretary Neal Wolin said, “It is not the role of the FIO to regulate the insurance industry. That job belongs to the states.” FIO Director Michael McRaith reiterated his support for the state regulatory system. McRaith, himself a former insurance director in Illinois, said he views the FIO’s role as an adviser to help find areas of improvements that state regulators can pursue.

The conference occurred as a panel of the House Financial Services Committee approved legislation stripping the FIO of its subpoena powers. The bill, H.R. 3559, the Insurance Data Protection Act of 2011, was sponsored by Steve Stivers (R-Ohio) and was approved along party lines. The vote was 7-5, with Republicans supporting it and Democrats opposing it.

PIA National met with FIO Director McRaith on November 29. McRaith requested the meeting to discuss PIA’s views on regulatory modernization priorities. McRaith met with PIA Executive Vice President & CEO Leonard C. Brevik, Senior Vice President Patricia A. Borowski and Assistant Vice President of Federal Affairs Mike Becker. PIA’s comments were on the record and will be included in FIO’s report to Congress. PIA National is preparing detailed written remarks to be submitted to the FIO. The written comments are due in mid-December.

Meanwhile, PIA remains concerned that the FIO’s report to Congress, for which all these comments are being solicited, will include recommendations from the FIO to expand the office’s mandate, to the detriment of state regulation and independent insurance agents. In an article in the December issue of American Agent & Broker magazine, PIA National’s Ted Besesparis writes of this concern that the FIO could morph into a “Frankenstein monster.”

Read the entire article on FIO's affirmation of its role: Potential Frankenstein (American Agent & Broker 12/2012)