FIO chief tries to quell state v. federal regulator debate
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The time has come to “move away” from the state versus federal debate over the best way to regulate insurance, the head of the Federal Insurance Office told a U.S. House panel on Tuesday.
Appearing before the House Financial Services Committee’s Subcommittee on Housing and Insurance, FIO Director Michael McRaith repeated his belief that the long-running regulator debate within the insurance industry and certain lawmakers hampers efforts to find solutions to insurance issues. He declined, however, to take a position on the McCarran-Ferguson Act of 1945, which gives states the authority to regulate insurance under most circumstances.
The hearing centered on the FIO’s recent report on modernizing insurance regulation. The report, initially supposed to have been released in January 2012, was delayed until December 2013. The delay in the report’s release drew fire from at least one committee member, who said: “If we’re asking for reports from FIO, we expect to get them and get them on time.” Mr. McRaith responded that “we regret” the report was delayed but was pleased with its quality.
Mr. McRaith had told the panel earlier that the FIO has done an “excellent job’’ of meeting its statutory requirements set out in the Dodd-Frank Wall Street and Consumer Protection Act of 2010, which established the FIO.
The report recommended a hybrid model of insurance regulation in which state and federal regulators play complementary roles to improve solvency and market conduct regulation. Several members of the subcommittee expressed concern that insurers could be subjected to inappropriate “bank-centric’’ regulations by federal and international regulators.
