The three-year anniversary of President
While FIO Director
Nelson said he has been meeting with McRaith and holding conference calls in an effort to clarify the FIO's role on the international stage. But he said more communication may be necessary. "Communication involves more than just meetings and telephone calls," Nelson said. "It has got to mean that FIO has to tell us their positions in advance, so we don't learn about them as a surprise or that they have a position but they can't tell us what it is. That's not communication."
Questions about the FIO's role have reached a point where Rep.
Under Dodd-Frank, the FIO is designed to serve as an information-gathering agency for
In a statement, a Treasury spokeswoman said that while individual states remain the primary regulatory authority over the business of insurance, Dodd-Frank makes clear the role of the FIO at the international level.
"According to Title V of the Act, FIO coordinates federal efforts and develops federal policy on prudential aspects of international insurance matters, including representing
However, Nelson said McRaith has attempted to speak on behalf of state insurance regulators and has "taken positions that run contrary to the state regulatory mechanism." Nelson said some of FIO's actions and statements have led to confusion among its international counterparts about whether the office is actually a regulator. He said only representatives of state regulatory bodies should speak on behalf of regulation.
"There have been international regulators who preferred to have a single voice for
Nelson said that ensuring the FIO and the NAIC are in step with each other on matters of insurance regulation has become increasingly important as the
Both Solvency II and the ComFrame proposal seek to impose a consolidated regulator. Regulators from
Nelson said one of the benefits of that system is that holding companies cannot "go in and take assets of a subsidiary insurer because a holding company needs capital." The U.S. system also prohibits a regulatory supervisor from unilaterally requiring the holding company to make such a move if it gets into financial trouble, Nelson said. The limits imposed on holding companies was demonstrated during the financial crisis when
"If you want to have integrity of insurers, as we had in the case of AIG, so the promises and the policies offered to policyholders are honored, you can't go to something where the supervisor has the authority to just unravel insurers, take assets out and put them into the holding company," Nelson said. "That's what we're protecting. If someone from Treasury goes out and says we need to have consolidated supervision, that could create problems."
Some of the confusion could be addressed by the FIO providing more information about its role in several long-overdue reports to
That said, FIO's work on the international stage has drawn praise from representatives of the U.S. insurance industry.
"We have shared our concerns about the current form of ComFrame, which we think could disadvantage large companies in markets where other companies may not be subject to additional regulations," Snyder said. "We would like to see more progress on supervisory coordination, and we have shared those concerns with FIO." (Best's News Service,
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|Source:||A.M. Best Company, Inc.|