Treasury Seeks Comments on Improving Insurance Regulation

October 18, 2011

The U.S. Treasury Department’s Federal Insurance Office is seeking public comment for its report on how to improve the country’s insurance regulatory system.

The study is mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The study aims to cover these topics:

1. Systemic risk regulation with respect to insurance;

2. Capital standards and the relationship between capital allocation and liabilities, including standards relating to liquidity and duration risk;

3. Consumer protection for insurance products and practices, including gaps in State regulation and access by traditionally underserved communities and consumers, minorities, and low- and moderate-income persons to affordable insurance products;

4. The degree of national uniformity of state insurance regulation, including the identification of, and methods for assessing, excessive, duplicative or outdated insurance regulation or regulatory licensing process;

5. The regulation of insurance companies and affiliates on a consolidated basis;

6. International coordination of insurance regulation;

7. The costs and benefits of potential Federal regulation of insurance across various lines of insurance (except health insurance);

8. The feasibility of regulating only certain lines of insurance at the Federal level, while leaving other lines of insurance to be regulated at the State level;

9. The ability of any potential Federal regulation or Federal regulators to eliminate or minimize regulatory arbitrage;

10. The impact that developments in the regulation of insurance in foreign jurisdictions might have on the potential Federal regulation of insurance;

11. The ability of any potential Federal regulation or Federal regulator to provide robust consumer protection for policyholders; and

12. The potential consequences of subjecting insurance companies to a Federal resolution authority, including the effects of any Federal resolution authority:

  • On the operation of state insurance guaranty fund systems, including the loss of guaranty fund coverage if an insurance company is subject to a Federal resolution authority;
  • On policyholder protection, including the loss of the priority status of policyholder claims over other unsecured general creditor claims;
  • In the case of life insurance companies, on the loss of the special status of separate account assets and separate account liabilities; and
  • On the international competitiveness of insurance companies.

The Treasury is seeking comments on these topics from policyholders, experts, consumer groups, state insurance regulators, insurance industry representatives and all other interested parties.

The deadline for submitting comments is Dec. 16, 2011. Comments may be sent electronically through the Federal eRulemaking Portal at, in accordance with the instructions. Treasury said electronic submissions are encouraged.

Comments may also be mailed to the Department of the Treasury, Federal Insurance Office, MT 1001, 1500 Pennsylvania Avenue, NW., Washington, D.C. 20220.

Responses should include the data or rationale including examples supporting any opinions or conclusions; approaches and options toward improvement or modernization, if any; and any specific legislative, administrative, or regulatory proposals for carrying out such approaches or options.

The Federal Insurance Office monitors all aspects of the insurance industry, including identifying issues contributing to systemic risk.

The office also monitors the availability and affordability of insurance to traditionally underserved populations; advises the Treasury Secretary on major domestic insurance policy issues; and develops and coordinates federal policy on international insurance regulatory matters.

Source: U.S. Department of the Treasury

Topics Legislation Policyholder

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