Waiting game continues for FIO report

by R.J. Lehmann on February 6, 2012

Those awaiting delivery of the Federal Insurance Office’s first major report on ways to improve and modernize U.S. insurance regulation will have to wait a bit longer, Insurance Journal is reporting.

Originally due Jan. 21 – 18 months after the enactment of the Dodd-Frank Act – FIO’s first report could still be several weeks away, the publication reported, citing a U.S. Treasury Department spokesperson.

“We are hard at work preparing FIO’s first report on how to improve and modernize the system of insurance regulation in the U.S., and expect to send the report to Congress in the coming weeks,” the spokesperson said.

FIO Director Michael McRaith reportedly has received more than 150 comment letters in advance of the report, including this one from myself and Heartland Institute Vice President Eli Lehrer, and has met with dozens of interested parties.

Treasury Secretary Tim Geithner did not mention the report — or the word “insurance,” for that matter — in his Feb. 2 remarks on the status of Dodd-Frank reform implementation. Some might take that to mean that insurance reform simply remains a low-priority issue for the  administration, which has been the conventional wisdom. But Aite Group analyst Stephen Applebaum posits another possibility: that the delay is evidence the administration is preparing to propose a more radical direction, such as federal regulation of insurance.

(N)umerous large and influential constituents have been impacted and represented in this process; collectively, they hold divergent and nuanced views on the matters under review. As a result, many of the report’s recommendations are guaranteed to be poorly received. It is therefore possible that this delay indicates that the U.S. Treasury Department, which is responsible for the FIO, is busy preparing to defend and explain an FIO Report that may displease a much higher percentage of stakeholders than has been anticipated.

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