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FIO, GAO Reports on Insurance Regulation Looming

Staff of the House Financial Services Committee tells PIA they plan to continue to pressure the Federal Insurance Office (FIO) to release a series of long-overdue reports, including one on insurance regulation...
June 5, 2013

Staff of the House Financial Services Committee tells PIA they plan to continue to pressure the Federal Insurance Office (FIO) to release a series of long-overdue reports, including one on insurance regulation. It is this report that PIA has been warning may be used by the FIO as a vehicle for a power grab for itself, to propose that it take over some or all insurance regulatory functions from the states. PIA opposed this study from the outset due to the fact that the questions being asked were biased in favor of federal regulation. One good thing: The committee’s Chairman Rep. Jeb Hensarling (R-TX) has strongly indicated to PIA he would oppose federal insurance regulation.

To provide a measure of balance that we expect will be lacking in the FIO report, last year PIA worked with then Insurance Subcommittee Chairwoman Judy Biggert (R-IL) and Rep. Steve Stivers (R-OH) on requesting a study from the Government Accountability Office (GAO) that looks into the benefits of the state insurance regulatory structure. The study was accepted and is due out from the GAO this summer. Final review of the study will take place this week, with a release possible at the end of this month; however, the release date can be postponed up to 30 days.

Shortly after becoming CEO of the National Association of Insurance Commissioners (NAIC) former Sen. Ben Nelson warned FIO that it needs to stick to its assigned role. “We are determined to see that FIO does the job it was intended to do, but not our job,” Nelson declared during the spring meeting of the National Conference of Insurance Legislators (NCOIL). During that speech, Nelson restated that the FIO is not a regulator. He then added, “I think they’re beginning to understand that.”

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