Lawmakers press for insurance representation on systemic risk panel

WASHINGTON—Federal lawmakers Thursday again raised concerns about the Obama administration's delay in naming an insurance expert as a voting member of the new Financial Stability Oversight Council.

During a hearing concerning the FSOC held by the House Financial Services Committee's Oversight and Investigations Subcommittee, legislators from both sides of the aisle expressed concern about the administration's lack of action.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the White House is required 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.

Treasury pressed for answers

“Can you indicate when the position will be filled?” Rep. Michael Fitzpatrick, R-Pa., asked Jeffrey A. Goldstein, Treasury undersecretary for domestic finance, during the hearing. Mr. Goldstein responded that he didn't have influence over the White House but added, “I understand that people are hard at work” on the issue.

Rep. Fitzpatrick continued to press the official, asking him whether he thought it was appropriate for the council to move forward on issues that could impact insurers without the insurance expert in place.

Mr. Goldstein replied that the council could call on insurance expertise without the insurance expert in place. Specifically, he noted the insurance expertise of two non-voting FSOC members—John Huff, the director of the Missouri Department of Insurance, Financial Institutions and Professional Registration, who represents the National Assn. of Insurance Commissioners on the council; and Illinois Insurance Director Michael McRaith, who recently was named head of the new Federal Insurance Office and is expected to assume the job's duties in June.

Insurance reps absent

The lead House sponsor of the Dodd-Frank Act—Rep. Barney Frank, D-Mass.—also pressed Mr. Goldstein on the issue, noting that “we worked very hard” to ensure that the insurance industry had adequate representation on the FSOC.

Mr. Huff also weighed in during his appearance before the panel, saying, “While FSOC engages in work that could impact insurers, two of our three insurance representatives are absent from the table.”