Federal Insurance Office
The Federal Insurance Office (FIO) was created as part of the Dodd-Frank bill. The FIO is part of the Treasury Department. The description on the US Treasury website describes the FIO as:
The Office monitors all aspects of the insurance industry, including identifying issues or gaps in the regulation of insurers that could contribute to a systemic crisis in the insurance industry or the United States financial system.
The Office coordinates and develops Federal policy on prudential aspects of international insurance matters, including representing the United States in the International Association of Insurance Supervisors. The Office assists the Secretary in negotiating (with the United States Trade Representative) certain international agreements.
The Office monitors access to affordable insurance by traditionally underserved communities and consumers, minorities, and low- and moderate-income persons. The Office also assists the Secretary in administering the Terrorism Risk Insurance Program.
The Federal Insurance Office is not a regulator or supervisor. Insurance is primarily regulated by the individual States.
The FIO has just released an annual report (six months late) on the State of Insurance in the US and abroad. The report has no surprises in it. One of the post-article commenters in one of the comment sections has asked if this was the same as what AM Best does for the industry.
Reading through the 51-page report was quite a task. There is nothing like insurance numbers in creating a yawn. Quite a large amount of the Executive Summary centered on the creation and justification of the FIO.
The FIO report kept referencing the SNL report. The FIO basically borrowed the numbers from a private institution SNL Financial. In fact, most of the charts came from SNL.
The Executive Summary has many acronyms in it for new groups that will enhance insurance regulation. The main point in the Executive Summary is low-interest rates have prevented insurance carriers from making a profit on investments. Therefore, the other avenue for carriers to make a profit is by underwriting gains also known as premium increases.
The earlier mentioned commenter was very accurate in their assessment. AM Best already covers this ground, so is the insurance analysis wheel being reinvented?
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