Five Key Questions:
For Insurance Companies Assessing the Potential Impacts of the New FIO
One of the less discussed creations of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) is the new Federal Insurance Office (FIO) within the Treasury Department. The FIO has been charged to monitor “all aspects of the insurance industry,” including gaps in regulation of insurers that could contribute to a systemic crisis in the insurance industry or the U.S. financial system, and to ensure that underserved communities (including low- and moderate-income persons) have access to insurance products. The FIO has also been tasked with studying the costs and benefits of potential federal regulation of insurance across various lines of insurance (excluding health care). President Obama has yet to announce his nominee to head the FIO, but Illinois Insurance Director Michael McRaith has been mentioned to be the leading candidate.
This week’s Spotlight highlights some of the most important issues that participants in the insurance industry will face as the Dodd-Frank Act is implemented through the regulatory rulemaking process.
- Is the FIO likely to impose additional regulatory burdens on insurance companies?
- How will the FIO go about conducting examinations of the insurance industry in the near future?
- Do insurance companies face the prospect of being designated as systemically significant entities?
- What new regulatory burdens may insurance companies face by being designated as “systemically significant”?
- What types of insurance are excluded from FIO regulation?