Today, Rep. Ed Royce (R-CA), with a bipartisan group of Financial Services Committee members, sent a letter to President Obama and Treasury Secretary Geithner to express their concerns that six months after the enactment of the Dodd-Frank regulatory reform bill critical insurance posts remain unfilled.
"I am happy to be joined by so many of my colleagues in calling for these appointments. Given the importance of the insurance market in our economy, it is disconcerting that decisions directly impacting this sector have been made without the participation of two statutorily-required insurance experts," said Royce.
In an effort to create a dedicated federal knowledge base on insurance matters the Dodd-Frank bill called for a Director of the Federal Insurance Office ("FIO") and an insurance-designee to the Financial Stability Oversight Council (the "Council"). Six months after the enactment of this legislation these critical insurance posts remain unfilled.
"An insurance-designee to the Council will provide a better understanding of the insurance sector as well as the regulatory structure overseeing it," said Royce. "Additionally, a FIO Director will be essential as we work to modernize and improve insurance regulation in the United States."
Note: The letter was sent by Rep. Royce (CA-40), Rep. Himes (CT-04), Rep. Miller (CA-42), Rep. Turner (OH-03), Rep. Moore (WI-4), Rep. Murphy (CT-05), Rep. Walsh (IL-08), Rep. Dold (IL-10), Rep. Tiberi (OH-12), Rep. Renacci (OH-16), Rep. Campbell (CA-48), Rep. Hayworth (NY-19), Rep. Capuano (MA-08), Rep. Ross (FL-12), Rep. Stivers (OH-15), Rep. Schwikert (AZ-05).insert other members. The final letter can be found here and full text of the letter can be found below:
February 16, 2011
The Honorable Barack H. Obama
President of the United States
The White House
1600 Pennsylvania Avenue, NW
Washington, DC 20500
Dear Mr. President:
The Dodd-Frank Wall Street Reform and Consumer Protection Act included certain provisions which were designed to create a dedicated federal knowledge base on insurance matters. Both the establishment of the Federal Insurance Office (the "FIO") within the Department of Treasury and the inclusion of an insurance expert as a voting-member of the Financial Stability Oversight Council (the "Council") acknowledged the vital role of the insurance sector in our economy. While we appreciate the size and the scope of the implementation task before you; we are concerned that, six months after enactment, the positions of the FIO Director and the Council's insurance-designee remain unfilled.
The Council has already met and acted on issues which directly impact the insurance sector. Within the last month, a proposed rule was released outlining the criteria that will be considered for designation of systemically important non-bank financial institutions and a study and recommendations were published on implementation of the Volcker Rule. Both of these steps will have a direct impact on the U.S. insurance market, yet the Council acted without the participation of two statutorily-required insurance experts. Their input would have brought a better understanding of the nature of traditional insurance activities and current regulatory structure overseeing this market.
Additionally, the FIO Director vacancy may hamper action on an important study on how best to modernize and improve insurance regulation in the United States. This examination of current insurance and reinsurance regulation will help guide Congress as we consider ways to ensure effective oversight, consistent consumer protection, and strong competition in the insurance sector.
Lastly, a robust FIO is essential in ensuring that the U.S. speaks with one voice internationally on insurance issues. With FIO participation, the U.S. will be able to maintain an active federal role within the International Association of Insurance Supervisors, better representing American interests and encouraging international cooperation.
Thank you for taking the time to consider our input. We look forward to working with you in the future on critical issues surrounding financial services.