Federal Regulation of Insurance Under Consideration, Treasury Doc Shows

The Federal Insurance Office isn’t fooling around.

The FIO, headed by Michael McRaith, at the U.S. Treasury Department put out a notice early on Friday, October 14 in the Federal Register to request comments on how to modernize and improve the system of insurance regulation in the U.S., and specifically put on the table the need for a federal regulator across multiple lines of insurance and any shortcomings in state insurance regulation that might need addressing to better protect consumers.

The FIO said it wants to hear from interested parties on the costs and benefits of potential federal regulation of insurance across various lines of insurance except for health insurance, the notice states.

The central point at issue seems to be the ability of any potential federal regulation or federal regulator to provide “robust consumer protection for policyholders” and any potential consequences of subjecting insurance companies to a federal resolution authority, according to the notice.

The Treasury’s FIO wants views on systemic risk regulation for insurers, capital standards and the relationship between capital allocation and liabilities, consumer protection issues on insurance products, including any “gaps in state regulation,” and access to affordable products across all lines by those traditionally underserved, such as minorities and low-and moderate-income persons.

The Dodd-Frank Act requires the FIO to conduct a study on how to modernize and improve the system of insurance regulation in the U.S.