FIO – Federal Insurance Office – Shocker
I read an article in a few of the major news outlets that somewhat shocked me. The shock was not too significant as I had predicted months ago that the Federal Insurance Office or FIO just being involved in international insurance matters was somewhat of a farce.
We all love it when we are proved accurate. I had warned many times the FIO was going to grab power to the point of Federalizing Workers Comp. A blatant start to the FIO covering more turf hit the insurance airwaves within the last few days.
Congressman Edward Royce from California has asked the FIO to look into exactly what status the National Association of Insurance Commissioners (NAIC) holds in its basic operations. He is concerned the NAIC is actually promulgating interstate regulation of the insurance industry. The NAIC is actually not important to me in the issue.
Where does the FIO actually possess this authority as their Director is now investigating the NAIC? The FIO was created to oversee any federal systemic risk . The FIO now may look to regulate any insurance carrier that would cause a systemic risk. The systemic risk idea came from the AIG bailout fallout.
As a side note, the Congressman introduced (drum roll, please) legislation initiating federal regulation of the insurance industry. Are you ready for another shock? The FIO reports to the Center for Medicaid/Medicare Services. (CMS)
I wrote quite a few articles on the Death of Workers Comp as we know it. This may not be the start of the process, but where there is smoke – there is fire. As a caveat, RIMS backs the federalization of insurance as a way to save money.
I have often said if you are a WC adjuster, underwriter, agent, etc. you will need to be very flexible over the next few years as to how your job will morph over time.
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