The U.S. Department of the Treasury’s Federal Insurance Office (FIO) today released its annual report on the insurance industry to the President and Congress.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, FIO must report annually on the state of the insurance industry and any other information deemed relevant or requested.
The report addresses the financial performance and condition of the principal sectors within the industry, and provides a review of recent insurer insolvencies, risk management and portfolio investment activities.
In addition, the report reviews key legal and regulatory developments affecting the insurance industry in the United States and abroad, and discusses current and emerging trends that may have a significant impact on the industry and the stability of the U.S. financial system.
The House Financial Services Subcommittee on Housing and Insurance will hold a hearing today (June 13 at 1 p.m. ET) on the impact of international regulatory standards on the competitiveness of U.S. insurers. Of particular interest to U.S. lawmakers are changes in solvency requirements known as Solvency II that will be implemented by the European Union in 2014.
The committee memo on the hearing says that many U.S. insurance companies are worried that their European subsidiaries may be subject to stricter regulation, such as higher capital requirements, than their European competitors if EU regulators do not find that the U.S. state-based regulatory regime is equivalent to that of the EU. “Because the EU is the U.S.’s largest trading partner in insurance services, U.S. insurance companies are eager to avoid being placed at a competitive disadvantage against their EU counterparts,” the committee memo said.
Michael McRaith, former Illinois insurance commissioner who is director of the FIO, is scheduled to testify at the hearing. Also scheduled to testify are Ben Nelson, former U.S. senator who is now CEO of the National Association of Insurance Commissioners (NAIC), and Roy Woodall, insurance representative on the Financial Stability Oversight Council.
A copy of the FIO’s annual report is available here.
Source: U.S. Treasury Department, Federal Insurance Office