NU Online News Service, Jan. 20, 10:46 a.m. EST
WASHINGTON—The Federal Insurance Office should study U.S.rate and policy form regulation and use the federal government’s foreign affairs powers to weigh in on international solvency issues, the American Insurance Association says.
This month the FIO is expected to provide its study on how insurance regulation should be modernized and improved under the Dodd-Frank financial services reform law.
The AIA, like many others in the insurance industry, has submitted comment.
The FIO should be charged "with developing a non-regulatory role to coordinate state supervision, establish more uniform regulatory standards, help assure uniform and rigorous cost/benefit analysis consistent with international norms, and foster consistent application of those standards," reads AIA's letters, signed by J. Stephen Zielezienski, AIA senior vice president & general counsel.
The FIO should catalogue instances where states continue to apply regulation “even where the standards have outlived their utility, and prioritize those standards for sunset,” AIA says.
The AIA letter says that to address concerns with the effectiveness of the regulatory system, the FIO should study the effects of U.S. rate and policy form regulation of property and casualty insurers in personal and commercial lines.
This should include a study of the extent to which such regulation undermines competition in private markets, decreases consumer choice and detracts from the goals of financial solvency oversight,” the letter reads. “The study should be comprehensive and build on the large body of existing work.”
On international issues, the AIA suggests that the FIO’s authority to engage at the international level on prudential insurance matters “should be fully implemented and expanded where necessary to preserveU.S.competitiveness and promote sound regulatory policy.”
In addition, the AIA says, “the FIO should be encouraged to coordinate with the state insurance regulators, the NAIC, and the industry on an outcomes-based regulatory approach that works for all interested parties.”