Posted on 22 Jul 2010
David A. Sampson, president and CEO of the Property Casualty Insurers Association of America (PCI), issued the following statement on Wednesday on President Obama's signing of the Dodd-Frank Act and the newly created Federal Insurance Office (FIO).
"The Dodd-Frank Act will rewrite the landscape of the financial markets; its effects will impact consumers and permeate all sectors of the economy. We remain concerned that the expansion of government regulation in this bill could impact long-term economic recovery and undermine the competitiveness of American companies to the benefit of foreign firms.
“Today marks half time in the overall financial overhaul process. The rule development stage will be just as important for identifying and minimizing overly broad regulation that will result in negative consequences for consumers.
“The newly created Federal Insurance Office will go into effect immediately. Home, auto and business insurance companies remained strong and stable throughout the financial crisis due to our unique regulatory structure that enforces strict solvency standards and consumer protections.
"We are pleased that Congress ultimately limited the scope of the Federal Insurance Office and recognized that it should not be a duplicative federal insurance regulator. The office is restricted primarily to monitoring the industry and advising Congress and federal agencies on insurance issues. However, federal regulators will have vast discretion over how this oversight is executed.
“Congress included important provisions in the final bill that will reduce duplicative information gathering requests on insurers. The Federal Insurance Office will be required to seek data from state regulators first before imposing costly and burdensome data demands on insurance companies. The Dodd-Frank Act also includes important Federal Insurance Office provisions for appropriate due process to address questions over federal preemption.
“As Washington regulators draft rules implementing this legislation, we urge a careful approach to adding federal oversight to the state-based insurance regulatory system that maintains these important safeguards and in doing so, will avoid unnecessary bureaucracy and help America’s insurers protect home, auto and business owners."