The director of the Federal Insurance Office rejects industry and congressional allegations it is somehow conspiring with foreign regulators to establish capital standards that will undermine the competitiveness of U.S. insurers.
In testimony prepared for delivery today to the House Financial Services' Subcommittee on Housing and Insurance — in what is expected to be the first look at the FIO's vision for its role in insurance regulation — Director Michael McRaith says he is operating within the agency's statutory authority.
The FIO has power to coordinate federal efforts and develop federal policy on prudential aspects of international insurance matters, including representing the U.S. in the International Association of Insurance Supervisors."
The International Association of Insurance Supervisors (IAIS) is a particular focus of industry and congressional concerns, with some industry and congressional sources saying they fear the IAIS will impose "bank-centric" regulatory oversight on U.S. insurers.
According to prepared remarks obtained by LifeHealthPro, McRaith will clarify the IAIS is advisory in nature — it is not a supervisor — and it "does not have any legal authority to direct or affect the structure or manner through which any jurisdiction regulates its insurance sector."
Creation of uniform international regulatory standards will make it easier for U.S. insurers to compete in emerging markets, says McRaith.
But the FIO unequivocally represents the U.S., he will reiterate.
"The U.S. insurance sector is diverse and that diversity is reflected in the views of its participants," McRaith will say. "FIO's priority, however, will always be the best interests of the U.S.-based insurance consumers and industry, and jobs and prosperity for the American people."
