Under repeated questioning about how the new office will make its presence felt over the insurance industry, McRaith cited restrictions placed on the FIO by the Dodd-Frank financial reform law that created it. The office must seek information from state regulators or another source before demanding any data from insurance companies, McRaith said, and therefore will not be a compliance burden on companies.
"It's not a regulator. It's not a supervisor," said McRaith, who served as Illinois' top insurance regulator before taking office June 1.
The National Association of Mutual Insurance Companies welcomed McRaith's comments. "Director McRaith's testimony shows that he has an understanding of the role the Federal Insurance Office was created to fill — that of an 'objective, reliable resource for information' on the insurance industry while the state insurance departments remain the functional regulators over the business of insurance," Jimi Grande , NAMIC's senior vice president of federal and political affairs, said in a statement.
McRaith parried inquiries on a number of topics, frequently referring members to other agencies or offices. "It would be inappropriate for me to comment at this time," he said in response to a question on whether the new Consumer Financial Protection Bureau should be granted authority over insurance issues.
The director said he still intends to meet a January deadline for producing a report on modernizing and improving how insurance is regulated in the United States. The report will be comprised of original reFederal Insurance Office Director Michael McRaith , in an appearance before the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity, sought to reassure lawmakers that his office is not and cannot be a full-fledged regulator of insurance.
Under repeated questioning about how the new office will make its presence felt over the insurance industry, McRaith cited restrictions placed on the FIO by the Dodd-Frank financial reform law that created it. The office must seek information from state regulators or another source before demanding any data from insurance companies, McRaith said, and therefore will not be a compliance burden on companies.
"It's not a regulator. It's not a supervisor," said McRaith, who served as Illinois' top insurance regulator before taking office June 1.
The National Association of Mutual Insurance Companies welcomed McRaith's comments. "Director McRaith's testimony shows that he has an understanding of the role the Federal Insurance Office was created to fill — that of an 'objective, reliable resource for information' on the insurance industry while the state insurance departments remain the functional regulators over the business of insurance," Jimi Grande , NAMIC's senior vice president of federal and political affairs, said in a statement.
McRaith parried inquiries on a number of topics, frequently referring members to other agencies or offices. "It would be inappropriate for me to comment at this time," he said in response to a question on whether the new Consumer Financial Protection Bureau should be granted authority over insurance issues.
The director said he still intends to meet a January deadline for producing a report on modernizing and improving how insurance is regulated in the United States. The report will be comprised of original research and address "practical problems and practical solutions," he said.
The FIO recently issued a call for public comments, including submissions from industry representatives, state regulators, consumer groups, policyholders and others. Comments are due Dec. 16 (Best's News Service, Oct. 17, 2011).
While not committing, McRaith expressed interest in participating in town meetings or other public forums. "We absolutely are interested in, and want to hear, the consumer view on the insurance industry," he said.
More than 100 "talented and qualified insurance experts" have made a pitch to join a to-be-established Federal Advisory Committee on Insurance, McRaith said in his opening testimony. The FACI, whose members may be announced in the near future, will consist of insurance regulators, industry representatives and others.
McRaith serves as an ex officio, nonvoting member of the Financial Stability Oversight Council. A newly proposed FSOC rule could mean insurance companies could be judged to pose a systemic risk and subject to Federal Reserve supervision and strict prudential standards. The industry is not singled out in the notice of proposed rulemaking nor is it excluded.