Lawmakers Mull Federal Oversight of Insurers - BodyShop Business

Lawmakers Mull Federal Oversight of Insurers

Federal oversight of the insurance industry appears to be more likely as President Barack Obama and members of Congress roll out plans to address the country’s economic woes in what experts say is the largest regulatory overhaul since the Great Depression.

House Financial Services Chair Barney Frank (D-Mass) said this week that his top priority is creating a systemic-risk regulator to oversee the activities of any financial firm – including banks, insurance companies and hedge funds – that poses a danger to the financial system. The Financial Services Roundtable (FSR) also unveiled its regulatory blueprint for financial firms that includes a federal regulator for property-casualty and life insurance firms. The FSR’s plan will be shared with lawmakers and the Obama administration.

Under the FSR’s plan, this new regulator’s position would combine the duties of the Office of the Comptroller of the Currency, the Office of Thrift Supervision and the Financial Industry Regulatory Authority. The plan would also give the U.S. Federal Reserve the authority to override other regulatory agencies if necessary to stabilize the entire financial system.

The FSR’s plan would also allow the U.S. Federal Deposit Insurance Corp. (FDIC) to insure national insurance firms, FSR Vice President for Insurance Peter Freeman said, noting that the proposal would also provide insurers with the option of becoming federally regulated.

Last week, six members of the House of Representatives sent a letter to newly sworn-in Treasury Secretary Timothy Geithner urging him to increase federal oversight of the insurance industry by creating an office within the Treasury or by installing someone “to fill a void on insurance oversight and expertise at the federal level” (click HERE to read more).

The insurance industry has been divided over the issue of federal oversight. After the letter was sent, the American Insurance Association’s (AIA) incoming president, Leigh Ann Pusey, commended the letter’s writers.

“It’s critical for Treasury and other public policy leaders to develop and institutionalize an insurance expertise at the federal level,” Pusey said. “Congress will soon debate the scope of federal regulation and whether to apply that oversight to insurers. That debate is certain to focus on the need to monitor systemic risk on a national basis. An OII would be a tremendously valuable tool for helping to inform that debate.”

However, members of the National Association of Professional Insurance Agents (PIA), the National Conference of Insurance Legislators (NCOIL) and others have come out against federal legislation, pointing to the downfall of federally regulated banks last fall as reason to leave the regulation of insurers up to states.

The six letter writers, however, believe the fall of another giant in 2008, insurer AIG, illustrates the need for federal oversight.

“We all share the belief that we must take steps to ensure that a similar situation does not occur in the future and we believe that an important first step ought to be the establishment of an office within Treasury which would have a knowledge base and understanding of insurance operations,” the letter stated.

You May Also Like

Body Bangin’: The Disengagement Epidemic with Kevin Wolfe

Micki Woods interviews Leaders Way Owner Kevin Wolfe on why 73% of work professionals are disengaged today and what we can do about it.

Micki Woods, master marketer for collision repair shops and owner of Micki Woods Marketing, has released the latest episode of "Body Bangin'," the video podcast that is taking the industry by storm!

In this episode, Woods interviews Kevin Wolfe, owner of Leaders Way and former mechanical shop owner, on how he became the shop everyone wanted to work at. Wolfe also points out that 73% of work professionals today are disengaged — an all-time high — and discusses why that is and how we can fix that.

Body Bangin’: I Thought We Were Doing It Right with Josh Piccione

Micki Woods interviews Josh Piccione on repairing vehicles correctly — according to manufacturer guidelines.

Body Bangin’: Be a Star Not a Hamster with Robert Snook

Micki Woods interviews popular keynote speaker Robert Snook on how to differentiate and grow your business.

Body Bangin’: Know Me, Know My Car with Mike Anderson

Micki Woods interviews Mike Anderson on the importance of building an emotional connection with your customers.

Body Bangin’: Fighting for Consumer Safety with Burl Richards

Micki Woods interviews Burl Richards on his personal mission to fight for consumers’ rights and safety.

Other Posts

Body Bangin’: The Employer-Student Disconnect

Micki Woods interviews Raven Hartkopf, lead collision instructor at Collin College in Texas, on what students want from a shop employer.

Body Bangin’: Why Follow OEM Repair Procedures?

Micki Woods interviews Logan Payne of Payne & Sons Paint & Body Shop on the importance of following OEM repair procedures.

Body Bangin’: Getting Paid for Calibrations

Micki Woods interviews Andy Hipwell and James Rodis of OEM Calibration on how to get started doing ADAS calibrations.

Body Bangin’: What Are The Consolidators Up To With Laura Gay

Micki Woods interviews Laura Gay of Consolidation Coach on the current state of auto body shop consolidation.