For insurers, one of the most consequential aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act is the establishment of the
The primary mission of the FSOC is to monitor financial services firms for signs of systemic risk. While this oversight is aimed largely at banks, the law grants the FSOC authority to require that nonbank financial companies may be supervised by the Board of Governors of the Federal Reserve System if it “determines that material financial distress at such a firm, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the firm, could pose a threat to the financial stability of the United States.”
The FSOC is to be made up of ten voting members – nine federal financial regulatory agencies and an independent member with insurance expertise. It is also supposed to have five nonvoting members, one of which will be the yet-to-be-named head of new Federal Insurance Office. In a letter to the White House,
“While we do not want to see the important work of the FSOC delayed, we also don’t want critically important decisions affecting the insurance industry made without the appropriate and legally required participation of insurance experts,” the letter states. “We therefore urge you and Secretary Geithner to appoint these two insurance representatives promptly so the insurance industry implications of FSOC’s work will be appropriately considered and any questions about the legitimacy of FSOC actions can be avoided.”
Blain Rethmeier, spokesman for the
