BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

FIO recommends hybrid strategy to regulate insurance

FIO recommends hybrid strategy to regulate insurance

The Federal Insurance Office on Thursday submitted to Congress its long-overdue report on the recommended framework of insurance regulation.

The 71-page report, “How to Modernize and Improve the System of Insurance Regulation in the United States,” mandated under the Dodd-Frank Wall Street Reform and Consumer Protection Act, was due in January 2012.

In the report, the FIO recommends a hybrid model of insurance regulation in which both state and federal regulators play complementary roles to improve solvency and market conduct regulation.

However, swift opposition to the FIO's recommended hybrid regulation came from advocates of maintaining state-based insurance regulation.

“The report reflects an extensive study of the insurance sector and benefits from the collective expertise and experience of state, federal and international supervisors,” Michael McRaith, director of the Federal Insurance Office, said in a statement. “It also recommends a hybrid approach to insurance regulation that provides a practical, fact-based roadmap to modernize and improve the U.S. system of insurance regulation. Importantly, this report reflects the dynamic nature of the regulatory system for insurers and provides an explicit path for state and federal regulatory entities to calibrate involvement going forward.”

Insurance industry reaction to the report was swift. Charles M. Chamness, president and CEO of the National Association of Mutual Insurance Companies, said his organization was wary of changes to the current state-based regulatory system.


“We respectfully disagree that federal involvement is necessarily the default answer to existing regulatory concerns,” Mr. Chamness said in a statement. “There is much room for improvement at the level of state insurance regulation, but recent experience has not proven that a one-size-fits-all nationally designed and operated program will remedy deficiencies and add real value. And the financial crisis experience of other sectors of financial services shows that federal regulation is no panacea.”

The American Insurance Association said it would thoroughly review the report before commenting on the specifics.

“The report provides a valuable guidepost for collectively working toward improvements that lead to greater regulatory effectiveness, efficiency, and marketplace competition,” Leigh Ann Pusey, CEO and president of the AIA, said in a statement.

The full report is available here.