The Federal Reserve Board is seeking to become one of the manyU.S. members of the International Association of InsuranceSupervisors (IAIS), according to sources.

The Fed is said to be negotiating with the NationalAssociation of Insurance Commissioners (NAIC) and the FederalInsurance Office (FIO) located within the U.S. Treasury to become amember of the IAIS' important Executive Committee.

The IAIS said through a spokesperson that it cannot discussinternal administrative matters, such as whether the Fed (or anyauthority) has submitted an application. Membership decisions aremade at the IAIS general meeting, which will be held in ChineseTaipei in mid-October. However, the Executive Committee can decideto allow an applicant to provisionally participate in IAISactivities until full membership is granted.

The Executive Committee currently has three U.S. members, twofrom the NAIC and one from the FIO. The North American region islimited to five seats on the Executive Committee. Canada and Mexicoeach have one. It is unclear at this time what role the Fed wouldplay at the committee level, but the math does not support thestatus quo if the Fed pushes to become an Executive Committeemember.

The Fed is a regulator of insurers or their holding companies,both the ones deemed systemically important financial institutions(SIFI) like AIG and Prudential and the ones that own thrift holdingcompanies like State Farm and TIAA-CREF.

However, the Fed has concerns and interests of its own. It wantsa seat at the table with IAIS, which is based in Basel,Switzerland, and hosts global, multi-tiered meetings.

People familiar with the situation say the Fed wants to be onthe ground, representing a singular voice for U.S. insuranceregulation of global insurers, when standards for group-widesupervision of internationally-active insurance groups aredeveloped.

The FSB said recently in a review of the U.S. system thatU.S. authorities should further enhance insurance group supervisionby introducing requirements for consolidated financial reportingfor all insurance groups and conferring additional powers andresources at the federal level where necessary.

The FSB has been heavy-handed lately, according to the NAIC andmany in the insurance industry, with its pronouncements ofshort-comings in the U.S. state regulatory system as it isconstructed, and its designation of global systemically importantinsurers even before the domestic federal oversight designationprocess had finished with the three U.S. insurers named.

A written roundup of recent insurance supervisory events pennedby Duane Morris LLC, a New York-based law firm, stated, “The FSB'sPeer Review Report notes that the multiplicity of stateregulators, the absence of federal regulatory powers to promotegreater regulatory uniformity and the limited rights to preemptstate law constrain the ability of the United States to ensureregulatory uniformity in the insurance sector.”

Insurance industry executives have repeatedly questioned overthe past few months any evidentiary need for new layersof oversight, standards and policies, and the cost to taxpayers andthe policyholders.

The FSB report also said the FIO should enhance its monitoringof the sector through increased use of non-public information, andshould be further strengthened to be able to take action to addressissues and gaps identified, which it is likely to do in itsupcoming financial modernization report, expected out inOctober.