The insurance industry may soon have a voting member on the Financial Stability Oversight Council (FSOC) after Former Treasury Official and Kentucky Insurance Commissioner S. Roy Woodall was nominated by President Obama and Treasury Secretary Timothy Geithner for the post this weekend.
If confirmed by the Senate, Woodall will join two non-voting insurance members on the FSOC: National Association of Insurance Commissioners representative and Missouri Insurance Director John Huff and Michael McRaith director of the newly created Federal Insurance Office.
Woodall’s nomination comes on the heels of calls by the insurance industry groups such as the
“We are pleased that the Department of Treasury has listened to the calls from the insurance sector and congressional leaders from both sides of the aisle to fill this critically important position,” says David Sampson, president and CEO of PCI. “Mr. Woodall brings extensive experience in the insurance sector and an understanding of the state insurance regulatory system.”
Leigh Ann Pusey, president and CEO of the
"Mr. Woodall is a dedicated public servant who has devoted his professional career to the field of insurance,” Pusey says. “Through his work as a state insurance commissioner, in the insurance trade association community, and at the U.S. Department of Treasury, Mr. Woodall has developed a deep understanding of the issues and has been exposed to some of the biggest challenges facing the industry.”
Pusey said Woodall’s experience is vital as the FSOC craft rules to determine which firms are deemed systemically important financial institutions (SIFIs) and subject to greater oversight.
"Mr. Woodall also has an intimate working knowledge of our industry and will be a strong voice in helping inform the other FSOC members on the distinctions between the property-casualty business model and other, bank-centric financial services.” Pusey says. “This will be especially critical as the FSOC deliberates on which non-bank financial firms it will designate as systemically important. AIA continues to believe the FSOC should adopt a risk-related activities-based approach to the SIFI designation process under Dodd-Frank for non-bank financial companies, rather than reverting to size as the primary determinant.”
Sampson agreed that the FSOC should treat insurance differently than other financial sectors, given the industry’s unique business model and the strong consumer protections already provided at the state level. “Property/casualty insurers are not highly leveraged or interconnected and have a fundamentally different business model than banks, a fact that warrants different regulatory treatment," he says.
