Trade groups representing large insurers and the biggest corporate buyer association are urging the Treasury Department to ensure that the Federal Insurance Office–created under the new financial services reform law–plays a strong role in representing the United States on global insurance issues.
"We believe there is an important role for the federal government with regard to insurance and reinsurance," the letter said.
The letter also asks that the Obama administration appoint someone to head the office "who has the experience and stature necessary to carry out the portfolio that Congress has enumerated for the FIO."
Although the Obama administration has not indicated whom it will name to the post, industry officials believe that a primary candidate is Michael McRaith, the insurance commissioner from President Barack Obama's home state of Illinois.
The carrier associations also demanded "active engagement" with the large domestic and foreign insurers and reinsurers they represent when it comes to drafting the reports the FIO is mandated to deliver to Congress on insurance issues.
Under the financial services reform law–known as the Dodd-Frank Wall Street Reform and Consumer Protection Act–the FIO is to report to Congress on ways regulation of the U.S. insurance industry can be improved. FIO must also deliver another report "on the breadth and scope of the global reinsurance market and the critical role the market plays in supporting insurance in the U.S."
"Making sure these reports incorporate industry input and provide objective analysis of these respective issues is key," the associations said in their letter.
The letter was signed by the American Council of Life Insurers, the American Insurance Association, the Association of Bermuda Insurers and Reinsurers, the Council of Insurance Agents and Brokers, the Financial Services Roundtable, and the Reinsurance Association of America–as well as the Risk and Insurance Management Society, which represents big commercial insurance buyers.
Speaking to legislative intent, the trade groups said they believe that, through the FIO, "the U.S. will, for the first time, be able to speak with one voice internationally and effectuate international recognition agreements with foreign nations on prudential insurance measures on an equal footing."
"This authority should be utilized to ensure equitable treatment for domestic and foreign insurers and reinsurers alike, promote job creation, and foster innovation and growth in the U.S. markets," according to the groups.
The letter also asks that the new agency use caution in demanding data on insurance industry activities from specific insurers.
"It is important that the FIO coordinates with the Office of Financial Research and uses available data from existing regulatory and non-regulatory sources (to include the NAIC and other trade associations) to avoid unnecessary and duplicative reporting burdens on companies," the groups wrote.
"Critical to this effort will be making certain the confidentiality provisions in the legislation are fully effectuated, ensuring that confidential company information can be safely shared with the FIO," the letter added.
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