Since the Federal Insurance Office selected Michael McRaith as its director over a year ago, it has become apparent how long his
While the anticipated FIO report on how to modernize and improve insurance regulations in the United States is, after missing its initial deadline of January 31, still in progress, McRaith delivered testimony last Thursday, but was only made public today, before a House Committee on Financial Services meeting titled, “U.S. Insurance Sector: International Competitiveness and Jobs.” In McRaith’s testimony, he outlines some of the FIO’s activity in lieu of the report, including the addition of four more professionals this month to bring its team up to 15.
The FIO is participating with the Financial Stability Committee, which was charged with developing the methodology and indicators to identify global systemically important insurers for the International Association of Insurance Supervisors (IAIS). The criteria will be released in November, with a subsequent list of insurers to be produced early second quarter of 2013.
Much of McRaith’s testimony emphasized the global nature of today’s insurance industry, citing such statistics as 60 percent of the U.S. reinsurance market is ceded to non-U.S. reinsurers, and globally, according to a McKinsey study, 33 percent of premium volume is generated outside an insurer’s home country.
McRaith stated that the FIO’s “immediate predominant focus is on international issues, involving key bilateral relationships and critical international initiatives,” including more work with IAIS to develop a common framework for the supervision of internationally active insurance groups, which they’re calling ComFrame.
He went on to add: “Given the current fast-paced development of international insurance supervisory standards, and the explosive growth of premium volume in emerging markets, FIO’s participation and engagement arrives at an opportune moment for U.S-based insurance consumers and industry.”
Speaking specifically to Solvency II, which is to be implemented in 2014, McRaith briefly outlined the FIO’s engagement with the European Union, European Insurance and Occupational Pension Authority and the Financial Services Authority of the United Kingdom as a “mutual assessment of the U.S. and EU insurance regulatory systems.” McRaith acknowledged unproductive talks between the two jurisdictions in the past, but assured a timely conclusion to the international dialogue.
