One thing I always find amusing about the insurance industry is its unabashed embrace of acronyms. Surely there are few other industries in the world in which you see quite as many of them bandied about—so much so, in fact, that a certain report we've awaited for quite some time contains a glossary of them that's nearly two pages long.

But I digress. One of the most discussed of insurance acronyms, of course, is the FIO, or Federal Insurance Office, which released just in time for Christmas its long-delayed report (created pursuant to the Dodd-Frank Act) that examines whether federal oversight is truly necessary in regulation of the insurance industry. It thoughtfully posits that the debate is not whether regulation should be state-based or federal, but whether there are areas in which federal involvement in regulation under the state-based system is warranted.

The report concludes that insurance regulation in the U.S. is best achieved through a hybrid model in which state and federal authorities can work together, their roles defined by which strength each party brings to the process of improving solvency and market-conduct regulation. Solvency, remember (or a lack thereof), is what started all this talk of increased regulation in the first place; it's hard to argue against the importance of preventing any of our industry's giants from ever again requiring a bailout.