The U.S House Committee on Financial Services’ Subcommittee on Housing and Insurance held a hearing titled, “The Impact of International Regulatory Standards on the Competitiveness of U.S. Insurers, Part II.” The hearing addressed potential methods of coordination among systems of insurance regulation worldwide, specifically the international regulatory standards proposed by the G-20, the Financial Stability Board, the International Association of Insurance Supervisors, and other international supervisory authorities. In his opening statement, Rep. Randy Neugebauer (R-TX), Subcommittee chairman, expressed the members’ desire to reach “a better understanding of how insurance supervisors are balancing the need to coordinate regulatory efforts overseas with their responsibility to promote a global marketplace that benefits domestic policyholders and insurers.”
Some members of Congress continue to struggle with having a 50-state regulatory structure for insurers, yet having these same regulators involved in developing a uniform international regulatory structure. Some state regulators and policymakers have consistently been fearful of the Federal Insurance Office (FIO) expanding its current authority. The current international regulatory discussion is part of this concern.
Michael McRaith, director of the Federal Insurance Office (FIO) at the U.S. Department of the Treasury, served as a witness at the hearing. In his testimony, McRaith explained that insurers operating in the United States have shown resilience in the aftermath of the financial crisis and have reported record levels of capital and surplus. He also expressed the FIO’s desire for the development of international standards that promote consistent oversight and said, “As the insurance sector evolves globally, the United States will continue to contribute constructively in support of that change, and work in support of international standards that, when implemented, will benefit U.S. consumers and U.S. insurers.”
While most members agreed that the U.S. needs to maintain its status as a chief architect of international standards, some differed on the best approach. Rep. Ed Royce (R-CA), senior Subcommittee member, expressed concern with the transparency of the regulatory bodies themselves, namely the National Association of Insurance Commissioners (NAIC) and the International Association of Insurance Supervisors (IAIS). In his statement for the Subcommittee, Royce said, “There is a clear intersection with the hearing today. The Committee’s review of international regulatory standards should also examine the transparency and accountability of the bodies making regulatory decisions.” Royce went on to cite specific examples of the NAIC’s frequent closed-door meetings.
Michael Consendine, commissioner of the Pennsylvania Insurance Department and committee witness, spoke on behalf of the NAIC and said, “We (NAIC) remain committed to transparent processes here at home. The NAIC has long provided forums for significant engagement by insurance consumers, industry representatives, and other stakeholders, while preserving a capacity for regulators to meet confidentially on sensitive regulatory matters. In fact, as we sit here today, my colleagues are holding public meetings and engaging stakeholders here in D.C. to discuss a variety of issues and initiatives being undertaken by the states, including our work at the IAIS and consideration of regulatory enhancements to our state-based system.” Consendine concluded that the NAIC needs to remain focused on protecting U.S. interests in the global insurance marketplace.
Other witnesses included New York Senator Neil Breslin, president of the National Conference of Insurance Legislators (NCOIL), and Thomas Sullivan, senior adviser, Board of Governors of the Federal Reserve System.
The Automotive Service Association is the largest not-for-profit trade association of its kind dedicated to and governed by independent automotive service and repair professionals. ASA serves an international membership base that includes numerous affiliate, state and chapter groups from both the mechanical and collision repair segments of the automotive service industry.
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