The U.S. Treasury Department said it will create a panel to advise regulators on insurance issues after the industry complained its views weren’t being heard on the Financial Stability Oversight Council.
The Federal Advisory Committee on Insurance will counsel the Treasury Department and the director of the new Federal Insurance Office, the Treasury said in a statement today. Half the members will come from state and local insurance regulators, and half “will represent a diverse range of perspectives” in the industry, according to the statement.
Industry groups, including the Property Casualty Insurers Association of America, have said insurance companies need greater representation on the oversight council, a group of regulators created to prevent another financial crisis.
The Dodd-Frank law that created the FSOC provides for the president to appoint someone with insurance expertise as one of its 10 voting members. That person hasn’t been chosen.
The Obama administration in March named Michael McRaith, who has been director of the Illinois Department of Insurance, to lead the Federal Insurance Office and have a non-voting spot on the FSOC. The office will gather data on the industry and doesn’t have regulatory power.
Industry groups argue that the FSOC, which includes Fed Chairman Ben S. Bernanke and Treasury Secretary Timothy F. Geithner, shouldn’t brand insurers systemically important. That designation would put the companies under heightened regulation, including Federal Reserve supervision.
In February, a bipartisan group of lawmakers urged Geithner to fill the FSOC insurance seats. House Financial Services Committee Chairman Spencer Bachus and Representative Barney Frank, the top Democrat on the panel, told Geithner in a letter they were concerned the council is “proceeding on major issues affecting the insurance sector without the benefit of a full complement of insurance expertise.”
David Sampson, president of the property casualty insurers group, said in a January letter to the White House that he was “extremely concerned” the FSOC is working on “highly important decisions” without enough knowledge of the industry.
The advisory committee will have no more than 15 members, who will be appointed by the Treasury to two-year terms, according to a notice to be published in the Federal Register.