A lot of coverage of the Dodd-Frank financial reform law focuses on what isn’t happening: How the White House can’t get a head for its Consumer Financial Protection Bureau through Congress in the face of Republican opposition, how the law could become more vulnerable with the retirement of one of its architects, Massachusetts Rep. Barney Frank. Just this morning, as Suzy reports, former FDIC chair Shelia Bair called for part of the law to be scrapped altogether.
But, quietly, parts of the law are indeed moving forward, albeit with few headlines and little fanfare. This very morning, a new Dodd-Frank office got underway with work to reform one of the country’s most complex regulatory systems: insurance regulation.
The Federal Insurance Office was created by Dodd-Frank to bring a more national voice to how we oversee insurance. Until now, a federal agency to focus on insurance regulation just didn’t exist.
“Despite the sector’s size and important,” said deputy Treasury Secretary Neal Wolin, “the federal government had no central repository for comprehensive insurance expertise.”
The new office doesn’t make many headlines; you won’t see many mentions outside of some trade journals. But industries understand its important: The FIO drew a standing-room-only crowd to its first ever meeting at Treasury this morning. And at that meeting, insurance executives asked the Dodd-Frank agency to bring more federal regulation into their industry — not exactly an everyday affair in Washington.
It’s not a normal request, but insurance isn’t exactly a normal industry when it comes to regulation. States tend to oversee all insurance products, from health to life to homeowners. And that worked fine decades ago, when insurance companies tended to be more localized. But for any national company operating now, having 50 state regulators set 50 different standards has made it a complex system.
“The current system is highly inefficient,” says John Johns, chairman of the Protective Life Corp., which sells life insurance policies. Or, as Consumer Federation of America’s J. Robert Hunter put it, “If Nebraska is regulating hurricane insurance in Florida and flood insurance in Georgia, we have a problem.”
Friday, December 9, 2011
The bizarre alternate Universe where Insurance Companies have ASKED for more Federal Regulation is this one!
Uhh...say that again Sarah Kliff of the Washington Post??