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Federal Insurance Office (FIO) May Have Effect on Workers Compensation


The New Federal Insurance Office (FIO)

The new Federal Insurance Office for Workers Comp was commenced by a financial reform package.  The Workers Compensation and other lines of insurance will be federalized. I have received questions on the newly legislated Federal Insurance Office (FIO). I mentioned it as a probable part of the federalization of Workers Comp and other lines of insurance. The FIO will be involved with Workers Comp as the bill does not delineate any line of insurance.

Picture of federal insurance office of Workers Comp

On Dec 2, 2009, a Federal Office was quietly established in a financial reform package passed by the House Financial Services Committee. The key committee passed H.R. 2609, the Federal Insurance Office Act of 2009.

I found it interesting that the Committee was introduced as not having any regulatory authority over the business of insurance and would not be able to override state insurance laws. I find that very hard to believe. The FIO is overseen by the U.S. Treasury Department. Within the Treasury Department, of course, is the Internal Revenue Service (IRS). Would this bill give the FIO the power on the level of the IRS?

The FIO was established to address two major areas that have been the focus of criticisms of state insurance regulation.

Washington Federal Insurance Office source of information
Wikimedia Commons – Phil Whitehouse

1. To establish a knowledge base or informational source in Washington, D.C.

2. Assist state insurance regulators in representing the United States in multilateral insurance discussions or entering into binding international agreements.

Let’s now look at what the revisions of the bill and what was altered or removed to satisfy all parties.

1. The bill now contains specific language that the bill does not establish a supervisory or regulatory authority over the business of insurance and bars the FIO from pre-empting state insurance laws governing rates, premiums, coverage requirements, antitrust laws, underwriting or sales practices.

2. The committee also amended the legislation to clarify that the definition of “insurer” under a mandatory data collection provision does not include insurance agents and agencies.

Picture Federal Insurance Office Financial Services
Wikipedia – ChristianSchd

3. The subpoena authority given to the FIO under the administration’s proposal also was removed. In the version passed by the committee, the FIO can request data from an insurer only after first checking with state regulators and the National Association of Insurance Commissioners that the required information is not already publicly available.

I am sure that with the passage of time and as the FIO begins to grow under the same agency that is over the IRS, the FIO will expand its powers. We have seen this often where agencies start small, gain power, and then regulate more and more with new legislation. I think that 1 – 3 above will likely be reconsidered over time.

I have been often questioned and debated over my view that Workers Comp and other lines of insurance will be federalized. If one looks at the CMS posts that I have written, Workers Comp has already been federalized. What if the CMS provides their data to the FIO and vice-versa? All it would take is a sharing of databases by the Federal and State governments.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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