NU Online News Service, May 12, 12:49 p.m. EST

WASHINGTON – Deputy Treasury Secretary Neal Wolin says the staff of the new Federal Insurance Office has already begun work and served an "important consultative role" in advising on several issues related to the new Dodd-Frank financial services reform law.

Wolin testified during a Senate Banking Committee hearing on how regulators are working to implement provisions of Dodd-Frank that deal with monitoring of systemic risk.

The FIO staff, which now includes former Illinois insurance director Michael McRaith, has provided "expert advice on the Volcker Rule study and rule writing, orderly liquidation authority rule writing, and participated in the Financial Stability Oversight Council insurance working group," says Wolin, adding the FIO has become a provisional member of the International Association of Insurance Supervisors (IAIS), where it will represent the United States.

The FIO is also leading the U.S. delegation for the insurance and pensions committee of the Organization for Economic Co-operation and Development, Wolin reports.

Wolin tells Sen. Sherrod Brown, D-Ohio, "it would be premature" to comment on whether mutual insurance companies would be regarded as systemically significant.

At the same time, Wolin did not touch on the elusive subject of the independent member of the Financial Stability Oversight Council board. This is a priority issue for the insurance industry, and it is unclear based on Wolin's testimony when the Obama administration will deal with it.

According to Dodd-Frank, the independent member must be nominated by the president and confirmed by the Senate.

Wolin says the new advisory committee on insurance that the Treasury Department is being created to provide advice to the FIO and the Treasury Department will reserve half of its membership for state insurance commissioners so that the FIO will benefit from the knowledge and regulatory experience of regulators.

"The remaining members will represent a diverse set of expert perspectives from the various sectors of the insurance industry (life, property and casualty, reinsurance, agents and brokers), as well as academics, consumer advocates, or experts in the issues facing underserved insurance communities and consumers," he says.