WASHINGTON—Although the property/casualty insurance industry still has some concerns about the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act two years after its enactment, industry experts say their worst fears haven't been realized.

In fact, two provisions of the law, which President Barack Obama signed on July 21, 2010, draw considerable praise from the industry. Those are the creation of the Federal Insurance Office and reform of the regulation of the surplus lines insurance market. There are still lingering concerns over how federal regulators will treat property/casualty insurers, as they attempt to decide what nonbank financial institutions present systemic threats to the economy and are thus subject to enhanced regulation.

Still, the situation is much better than some experts expected in 2008 as the federal government rescued American International Group Inc. as it stood on the brink of collapse.

“If someone had told me in September of 2008 in the aftermath of the federal intervention on AIG that Dodd-Frank would not have led to the imposition of a redefining new federal regulatory authority, I would have said, "You're crazy,'” said Joel Wood, senior vp at the Washington-based Council of Insurance Agents & Brokers.

“I think the industry fared extremely well as a relative matter in Dodd-Frank,” Mr. Wood said.

Unlike the act's effect on the banking sector, property/casualty insurers have felt “a light touch,” said Wes Bissett, senior counsel-government affairs for the Alexandria, Va.-based Independent Insurance Agents & Brokers of America. “That's a good thing for us,” he said.

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Mr. Bissett said the surplus lines reform provision was particularly significant. The provision holds that no state other than the home state of a policyholder can require premium taxes on nonadmitted insurance, leaving it to the states to determine how to allocate taxes among themselves. In addition, it subjects placement of nonadmitted insurance only to the regulation of the policyholder's home state under most circumstances.

“The surplus lines forms clearly have been a net positive for the industry. Have they produced the ideal reform? No. But are we better off? The answer is a clear yes on that. The nice thing is we've gone to a single-state system of regulation,” he said.

“It's less of mishmash,” said Mr. Wood. Before the reform “it was very, very difficult if not impossible to reconcile competing state rules on multistate risks. Now there's one standard, the standard of the home state of the insured.”

The FIO draws praise, too.

“FIO has done a good job,” said J. Stephen Zielezienski, senior vp and general counsel at the Washington-based American Insurance Assn. “It has been what we have expected. I think FIO Director Michael McRaith has taken an authoritative role where Dodd-Frank gives him responsibility.”

Mr. Zielezienski said AIA hopes the global process for determining systemically important financial institutions “will play out and will align itself with the rulemaking under Dodd-Frank. I have every confidence the FIO will right that ship.”

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“There's a lot obviously that has yet to be concluded,” said David Snyder, vp-international policy for the Property Casualty Insurers Assn. of America in Washington. “One positive is the international role of FIO in being part of the U.S. team now in international negotiations. The clearest example of that is the discussions between the European Union and U.S. on how our regulatory systems compare and trying to avoid a non-equivalence determination.”

“The biggest remaining concern comes from the sheer scope and size of Dodd-Frank,” said Jimi Grande, senior vp in the National Assn. of Mutual Insurance Co.'s Washington office.

“There are any number of unintended consequences and implementation issues that still remain.”

AIA's Mr. Zielezienski said that this year the Federal Reserve issued proposed rules announcing enhanced prudential standards and early remediation standards that it would apply to large banks and nonbanks that are designated systemically significant financial institutions. He called it a “one-size-fits-all” approach.

“That's OK if it's only banks, but if an insurance company is unfortunate enough to be designated, it should have rules that are tailored to its business model,” he said.

“You just can't take a bank-centric approach and apply it to insurers. It just doesn't work,” Mr. Grande said.