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Insurance industry praises Financial Stability Oversight Council nominee

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WASHINGTON—President Barack Obama’s nomination of S. Roy Woodall to fill a voting position on the Financial Stability Oversight Council is drawing considerable praise from insurance industry observers.

The industry had long been concerned that the slot for a voting member representing insurance had remained vacant long after all other positions on the council—which oversees regulation of financial services institutions—had been filled. Insurers feared that a council would subject them to additional regulation should it deem insurers to present a systemic risk to the economy.

Insurers have argued that they present no such risk.

The White House’s Friday nomination of Mr. Woodall, a former Kentucky insurance commissioner who recently retired as senior insurance policy analyst at the U.S. Treasury Department, has been greeted favorably by insurers and others.

“It’s important to have someone with the right insurance expertise in this slot, and Roy Woodall has certainly served as regulator and in the administration and is well-positioned to add a valuable voice on behalf of the insurance industry,” said Leigh Ann Pusey, president and CEO of the American Insurance Assn. in Washington.

Previous work lauded

In a Monday statement, Ms. Pusey noted Mr. Woodall’s involvement in the establishing a federal backstop for terrorism insurance in 2002.

“After the attacks of Sept. 11, 2001, AIA worked very closely with Mr. Woodall and the team at the Treasury Department in designing a Terrorism Risk Insurance Program that provided the necessary financial security to help America recover and built an effective public-private partnership that has benefited U.S. business,” she said.

“His wealth of experience can only help to bring the perspective that FSOC needs on insurance issues,” said Dylan Jones, director-federal affairs in the Washington office of the Indianapolis-based National Assn. of Mutual Insurance Cos.

Frank Nutter, President of the Washington-based Reinsurance Assn. of America, noted that Mr. Woodall has been discussed as a possible candidate for the slot for months in Washington circles.

“He’s well-respected and knowledgeable about the insurance market and regulation,” Mr. Nutter said. “We’ve worked with him for years as a person from the Treasury, and have always had a great respect for his knowledge and constructive attitude.”

“Mr. Woodall will play a very important role on the FSOC as regulators implement the Dodd-Frank Act related to nonbank financial institutions,” said David Sampson, president and CEO of the Des Plaines, Ill.-based Property Casualty Insurers Assn. of America, in a statement.

“The Dodd-Frank (Wall Street Reform and Consumer Protection Act) appropriately treats insurance very differently than other financial sectors, and it recognizes the strong consumer protections already provided by the state regulatory and guaranty fund system. Property casualty insurers are not highly leveraged or interconnected and have a fundamentally different business model than banks, a fact that warrants different regulatory treatment,” Mr. Sampson said.

Dodd-Frank requires the White House to appoint a person with “insurance expertise” as a voting member of the FSOC. The FSOC has the power to designate financial institutions as presenting a systemic risk to the economy, making them subject to greater regulation.

Two nonvoting members with insurance backgrounds—John Huff, the director of the Missouri Department of Insurance, Financial Institutions and Professional Registration, and former Illinois Insurance Director Michael McRaith, who recently was named head of the new Federal Insurance Office—already serve on the FSOC.

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