The Treasury Department’s Federal Insurance Office has issued a formal notice and request for comment for its study/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.

Published in the Federal Register today, the request for comments seeks feedback from policyholders, experts, consumer groups, state insurance regulators, insurance industry representatives and all other interested parties.

Since the study must be submitted to Congress not later than 18 months after the date of the Dodd-Frank Act’s enactment, the FIO issued a deadline of Dec. 16 for responses and instructions on what responses should include: (1) The data or rationale, including examples, supporting any opinions or conclusions; (2) approaches and options toward improvement or modernization, if any; and, (3) any specific legislative, administrative or regulatory proposals for carrying out such approaches or options.

The FIO, headed by Director Michael McRaith, was established to monitor all aspects of the insurance industry, including identifying issues contributing to systemic risk. The FIO 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.

Commenters are invited to submit views on:

1. Systemic risk regulation with respect to insurance;

2. Capital standards and the relationship between capital allocation and liabilities, including standards relating to liquidity and duration risk;

3. 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;

4. 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of State insurance regulation, including the identification of, and methods for assessing, excessive, duplicative or outdated insurance regulation or regulatory licensing process;

5. The regulation of insurance companies and affiliates on a consolidated basis;

6. International coordination of insurance regulation;

7. The costs and benefits of potential Federal regulation of insurance across various lines of insurance (except health insurance);

8. 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;

9. The ability of any potential Federal regulation or Federal regulators to eliminate or minimize regulatory arbitrage;

10. The impact that developments in the regulation of insurance in foreign jurisdictions might have on the potential Federal regulation of insurance;

11. The ability of any potential Federal regulation or Federal regulator to provide robust consumer protection for policyholders; and

12. The potential consequences of subjecting insurance companies to a Federal resolution authority, including the effects of any Federal resolution authority:

i. 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;

ii. On policyholder protection, including the loss of the priority status of policyholder claims over other unsecured general creditor claims;

iii. In the case of life insurance companies, on the loss of the special status of separate account assets and separate account liabilities; and

iv. On the international competiveness of insurance companies.

-- This article first appeared on Insurance Networking News.

Register or login for access to this item and much more

All Bank Investment Consultant content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access