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Lawmakers Again Criticize IAIS for Closing Its Meetings

Lawmakers continued their criticism of the recent action by the International Association of Insurance Supervisors to revoke the observer status of many stakeholders and make attendance at its meetings possible only by invitation...
November 26, 2014

Lawmakers continued their criticism of the recent action by the International Association of Insurance Supervisors (IAIS) to revoke the observer status of many stakeholders and make attendance at its meetings possible only by invitation. The IAIS is a standard-setting group of insurance supervisors from many countries.

A November 18 hearing before the U.S. House Subcommittee on Housing and Insurance, "The Impact of International Regulatory Standards on the Competitiveness of U.S. Insurers," was called by Chairman Randy Neugebauer (R-Texas), who said the rule change was "worrying" because it would limit one of the few ways insurers and consumers can present their concerns to the IAIS. He compared the IAIS to the U.S. Treasury's Financial Stability Oversight Council (FSOC), which he also criticized for lacking transparency.

"So if I understand international developments correctly, we are on the verge of importing the European model of insurance regulation here at home and exporting the non-transparent FSOC model to our trading partners at the IAIS," Neugebauer said.

During the hearing, Federal Reserve Board Senior Advisor on Insurance Tom Sullivan said the Fed and the Federal Insurance Office (FIO) are working with the National Association of Insurance Commissioners (NAIC) on a "Team U.S.A." approach to interactions with the IAIS. However, it seems that not everybody is loyal to the home team. When the proposal to close meetings was put to a vote by the IAIS, the NAIC voted against it – but the FIO supported it.

FIO Director Michael McRaith said the FIO supported the rule change because it did away with a $20,000 fee to official observers at IAIS. "Now, the public and observers get the same information but they don't have to pay $20,000 to get it," McRaith told Best's News Service. Of course, this misses the point entirely. The stakeholders now shut out of the meetings are losing their opportunity to offer input and participate in the process. The IAIS has admitted as much, saying the aim of the rule change is to ensure meetings don't become "bogged down" in debates.

FIO's McRaith, Fed's Sullivan Defend Their Work at Hearing (Best's News Service 11/18/14)

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