Rep. Judy Biggert, R-Ill., wants to know why the Federal Insurance Office still hasn’t issued its much-awaited report on insurance regulatory modernization.
Biggert, who serves as chairwoman of the House Financial Services Committee’s subcommittee on insurance and housing, posed that question to Treasury Secretary Timothy Geithner at a March 20 hearing on the international financial system. Geithner is FIO Director Michael McRaith’s boss. From the hearing:
Biggert: Title V of the Dodd-Frank Act created the Federal Insurance Office at Treasury. And in conjunction with state regulators and the U.S. trade representatives, one of their most important missions is to strengthen the international competitiveness of the U.S. insurers and reinsurers. And FIO is to represent the United States in international forums and increase U.S. influence in the development of international insurance standards. In your opinion, does FIO have the adequate staffing and other resources to successfully carry out this international mission?
Geitner: I believe so, but if that were not the case, we’d fix it, and we’d listen carefully to concerns people have. And I am personally very committed to making sure that that office has the resources it needs.
Biggert: Well, FIO was required to submit two reports in September and one in January and they’re late. And when will we see those reports?
Geithner: You’re right, they’re late, and they’re coming. They’re getting closer. We’ve just been a little busy and I apologize for the fact that they’re a little behind. But that’s not really a resource question, it’s just the fact they want to get this…do it carefully.
The two September reports Biggert referenced are annual reports that actually, based on the text of Dodd-Frank, don’t appear to be due until September of this year. The law requires FIO provide an annual report to the White House, Financial Services and Ways and Means committees in the House, and the Finance and Banking committees in the Senate, on any actions it has taken in the past year. It also must provide a report each year to the White House, Financial Services and Banking committees on “the insurance industry and any other information as deemed relevant by the Director or requested by such Committees.”
The law requires those reports be submitted prior to Sept. 30 each year, but that requirement kicks off “beginning September 30, 2011,” which suggests it would not yet have been in-force in September of last year. Which is understandable, as FIO hadn’t yet done anything before last September. Indeed, McRaith was only named to the post a couple of months earlier.
But FIO is indeed now some two months late in submitting its “report to Congress on how to modernize and improve the system of insurance regulation in the United States.” The law required that study be submitted “not later than 18 months after the date of enactment of this section,” or roughly Jan. 21, 2012. (FIO is also slated to deliver a report on global reinsurance by Sept. 30, 2012 and one on implementation on certain reinsurance provisions of Dodd-Frank by Jan. 1, 2013.)
The delay was a major bummer for organizers of this year’s Networks Financial Institute summit on insurance regulation, held March 21 in Washington, D.C. The annual conference was scheduled two weeks later than usual specifically to make sure that it would come after the release of the FIO report, and McRaith had been booked as the keynote speaker. The delay forced McRaith to cancel, and for most of the day’s discussions to amount to rather open-ended speculation on what might be in the offing.
Though hard to tell if these are tea leaves worth bothering to read, the Federal Advisory Committee on Insurance – a 16-member panel established to provide FIO with advice from a diversity of perspectives – is set to hold its first meeting at 1 p.m. March 30 in Treasury’s famous Cash Room.