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The American Insurance Association (AIA), Property Casualty Insurers Association of America and other property/casualty insurance trade groups are telling the federal Financial Stability Oversight Council that property/casualty insurers don’t present “systemic risks” to the economy and therefore don’t require increased supervision.
In a filing dated Nov. 5, AIA urged the council to conduct a two-stage analysis to determine whether a company could present a systemic risk. The council first would figure out whether a company could generate systemic financial instability. “If, as a result of the council’s external impact analysis, a nonbank financial company comes under closer scrutiny, the council should next evaluate those factors that go to the internal financial structure of the institution to determine the potential for material financial distress that could pose a threat to U.S. financial stability,” the AIA wrote.
In a poll conducted on www.bodyshopbusiness.com, 69.4 percent of respondents said they favored the federal regulation of insurance, while 30.6 percent said they did not.
Collision repairers who do favor insurers being federally regulated most likely believe a fresh set of eyes scrutinizing the insurance business might uncover what some believe are illegal and unfair business practices. Repairers who favor state regulation say it would take an enormous amount of resources to lobby at the federal level.