Secretary Treasury Geithner on Thursday officially announced that Michael McRaith, director of the Illinois Department of Insurance, is to become the first person to run the new Federal Insurance Office. See related article.
McGraith will also serve as a nonvoting member on a new federal panel created to determine which financial firms present a risk to the financial system and be the U.S.'s public face in negotiating international insurance agreements.
The Dodd-Frank financial regulation bill, which was approved by Congress in July, created the Federal Insurance Office as part of its overall reforms. State insurance offices have been the primary regulators of the industry for more than a century.
McRaith's appointment is not expected to immediately change the role of the states to any large degree, but the new director is required to submit a report to Congress on how best to modernize and improve insurance regulation by early 2012. Both critics and supporters of a larger federal role in insurance regulation have suspected the report will conclude that the U.S. should have a greater presence.
McRaith has been with the the National Association of Insurance Commissioners. He is the secretary-treasurer of the group, and will step down when he takes over the Federal Insurance Office. He also has represented state regulators in dealings with the International Association of Insurance Supervisors and the international Organization for Economic Cooperation and Development.
McRaith will be one of three members of the new Financial Stability Oversight Council with an insurance background. The council, another creation of the Dodd-Frank bill, is identifying companies that are so large, complex or interconnected that their failure could destabilize the entire financial system. It has 18 members and is headed by Geithner.