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The U.S. Senate has confirmed Thomas Workman as the independent voting member with insurance expertise on the Financial Stability Oversight Council.
The Senate confirmed Mr. Workman — who served as president and CEO of the New York-based Life Insurance Council of New York Inc. from 1999 to 2016, and prior to that chaired the insurance law practice group of Bricker & Eckler L.L.P. in Columbus, Ohio, from 1973 to 1999 — by voice vote on Wednesday.
Mr. Workman, who will serve a six-year term, replaces Roy Woodall on the council. It was the pending expiration of Mr. Woodall’s term that prompted the September passage of legislation to allow the independent insurance expert to remain on the council until 18 months after the date on which the term of service ends or the date on which a successor to the member is appointed and confirmed, whichever is earlier.
The council has the responsibility of evaluating companies and had designated four nonbank institutions as systemically important financial institutions — subjecting them to stricter oversight and stricter capital requirements — since the financial crisis. Institutions designated as SIFIs are subject. But the FSOC rescinded the SIFI designation of American International Group Inc. in September and New York-based MetLife Inc. and the FSOC jointly agreed to the dismissal of litigation over MetLife’s SIFI tag in January, leaving Newark, New Jersey-based Prudential Financial Inc. as the remaining nonbank SIFI.
In November, the U.S. Treasury Department recommended a different approach to evaluating the potential risks posed by nonbank financial companies rather than the current method that led to the insurers being tagged as “too big to fail.” And legislative proposals in the U.S. House of Representatives would eliminate the council’s ability to tag insurers as SIFIs.
“Thomas Workman’s experience and expertise from his 17 years with the Life Insurance Council of New York Inc. will prove vital to FSOC, especially as it reviews recommendations in the Treasury Department’s report on FSOC designations,” Dirk Kempthorne, president and CEO of the American Council of Life Insurers, said in a statement on Monday. “No life insurer should be designated as systemically important. The Treasury report correctly notes that designating insurers as systemic does not help resolve potential risks to our nation’s financial stability.”
“Too big to fail” designations for insurers may become a thing of the past amid a Republican-led effort to eliminate or revise certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, but the impact will be limited as only two insurers are currently tagged with the designation.