Posted on 25 Jun 2010
Wednesday night the House-Senate conference committee on financial services regulatory reform agreed to the final provisions for the new Federal Insurance Office (FIO) in Title V of H.R. 4173, The Wall Street Reform and Consumer Protection Act. The following statement was made on Thursday by David A. Sampson, president and CEO of the Property Casualty Insurers Association of America (PCI):
"Home, auto and business insurance companies have remained strong and stable through the financial crisis and are not systemically risky.
“Insurance companies operate very differently than banks and are effectively regulated at the state level. Duplicative federal oversight threatens to add costs to the insurance marketplace without corresponding benefits to the consumer. It also creates potential conflicts with existing state regulatory protections.
“State insurance regulators have a proven system of protecting insurance consumers. State regulators enforce stringent solvency requirements, product regulation and post-sale safeguards for insurance products.
“Significant improvements have been made to the proposed federal insurance oversight office.
"We are particularly pleased that the conference report now includes important FIO provisions for appropriate due process to address questions over federal preemption. FIO determinations will be subject to de novo judicial review.
"International agreements that Treasury negotiates under authority granted in the bill will also be subject to the same preemption limitations and due process.
"Additionally, the new provisions help reduce duplicative information gathering requests on insurers. FIO will be required to seek data from state regulators first before imposing costly and burdensome data demands on insurance companies.”