NU Online News Service, Jan. 20, 10:46 a.m.EST

WASHINGTON—The Federal Insurance Office should studyU.S.rate and policy form regulation and use the federalgovernment's foreign affairs powers to weigh in on internationalsolvency issues, the American Insurance Association says.

This month the FIO is expected to provide its study onhow insurance regulation should be modernized andimproved under the Dodd-Frank financial services reformlaw.

The AIA, like many others in the insurance industry, hassubmitted comment.

The FIO should be charged "with developing a non-regulatory roleto coordinate state supervision, establish more uniform regulatorystandards, help assure uniform and rigorous cost/benefit analysisconsistent with international norms, and foster consistentapplication of those standards," reads AIA's letters, signed by J.Stephen Zielezienski, AIA senior vice president & generalcounsel.

The FIO should catalogue instances where states continue toapply regulation "even where the standards have outlived theirutility, and prioritize those standards for sunset," AIA says.

The AIA letter says that to address concerns with theeffectiveness of the regulatory system, the FIO should study theeffects of U.S. rate and policy form regulation of property andcasualty insurers in personal and commercial lines.

This should include a study of the extent to which suchregulation undermines competition in private markets, decreasesconsumer choice and detracts from the goals of financial solvencyoversight," the letter reads.  "The study shouldbe comprehensive and build on the large body of existing work."

On international issues, the AIA suggests that the FIO'sauthority to engage at the international level on prudentialinsurance matters "should be fully implemented and expanded wherenecessary to preserveU.S.competitiveness and promote soundregulatory policy."

In addition, the AIA says, "the FIO should be encouraged tocoordinate with the state insurance regulators, the NAIC, and theindustry on an outcomes-based regulatory approach that works forall interested parties."