Press Center

 Remarks by Deputy Secretary Neal Wolin at Federal Insurance Office Conference


12/9/2011
 As Prepared for Delivery
 
Thank you, Mike, for that kind introduction, and for all your hard work standing up the Federal Insurance Office (FIO). Great to be here.
 
Thank you all for joining us and welcome to the Treasury.
 
Everyone here today knows what an important role insurance plays – not only in the smooth and efficient functioning of our economy, but also in Americans’ everyday lives, protecting their homes, their wealth, and their businesses. In the U.S. alone, spending on insurance comprises about 8 percent of GDP. The insurance sector employs fully two percent of our workforce.
 
Despite this sector’s size and importance, before the Dodd-Frank Act was passed, the Federal government had no central repository for comprehensive insurance expertise.
 
Dodd-Frank fixed this glaring omission so that, through FIO, we will have the institutional capability to develop and coordinate insurance policy at the federal level more effectively than in the past.
 
FIO has begun carrying out the responsibilities laid out for it in the Dodd-Frank Act. As you all know, the office is responsible for, among other things:
 
  • Monitoring the insurance industry, identifying gaps in regulation, and participating in the Financial Stability Oversight Council (“the Council”) – all to help ensure stability in the insurance industry and the broader financial system;
  • Developing and coordinating federal policy on prudential aspects of international insurance matters;
  • Evaluating the accessibility and affordability of insurance products for low- and middle-income Americans; and
  • Advising the Secretary of the Treasury on insurance issues.
To be clear: regulating the insurance industry is not one of FIO’s responsibilities. Nothing in the Dodd-Frank Act alters the fact that insurance is fundamentally regulated by the states.
 
State regulators are important partners in our work. As FIO moves forward, we understand that maintaining a strong relationship with the states will be critical for fulfilling the responsibilities Congress assigned to the new office.
 
In recent months, FIO has made important progress. Through its work with the Council, FIO has already lent its expertise to Dodd-Frank Act studies and rulemakings that are central to financial regulatory reform. 
 
Both in this work, and in its advisory role helping the Council monitor risks to U.S. financial stability, FIO works closely with two other Council members who provide perspectives on insurance:  Former Kentucky Insurance Commissioner Roy Woodall, who serves as the Council’s independent insurance expert, and the Director of Missouri’s Department of Insurance John Huff, who was selected by state insurance regulators. 
 
FIO’s advisory body, the Federal Advisory Committee on Insurance, has also been established. Last month, FIO announced the appointment of 15 insurance experts, approximately half of whom are state insurance regulators, to serve as its first members.  
 
On the international side, FIO recently became a full member of the International Association of Insurance Supervisors (IAIS), which is currently working to designate globally significant insurers and develop a framework for supervising of internationally active insurance groups. FIO will continue to work closely with state regulators as it develops and advances a U.S. perspective on these and other international insurance regulatory matters.
 
Finally, as you all know, FIO will report to Congress in January on how to improve and modernize the United States’ system of insurance regulation. We want the views of a wide range of stakeholders to inform our work.
 
To that end, we are reaching out in a variety of ways. In October, we put out a request for public comments in the Federal Register. The comment period closes on December 16, and we encourage all interested parties to submit their thoughts on the issues we’ll cover in the report.
 
Today’s conference is an important part of our outreach process, and a valuable opportunity to convene experts with different views and experiences together in one room. We look forward to hearing your ideas and appreciate the time you’ve taken to be here to share them.
 
Going forward, we look forward to continuing to work with you and hear your perspectives on FIO’s work in both the domestic and international context. In the U.S., FIO will continue to play an important role in the FSOC as it continues to work on the designations process and monitors systemic risk. Globally, FIO is engaging with the international community and starting to play an important role in the IAIS, one we look forward to fully assuming.
 
Again, we welcome you here to the Treasury. We hope to see you here often. We look forward to a productive and insightful day.
 
Thank you.
 
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