Nearly six months ago, the Federal Insurance Office blew past its January deadline for a federal report, promising it in the coming weeks. After those weeks had passed, it provided reassurance that it was just around the corner, then it was just around the corner after that, until finally they stopped making promises (and appearances) altogether.

What’s the hold up?

At Monday’s morning session on the FIO at the Insured Retirement Institute’s Government, Legal and Regulatory Conference in Washington, D.C., John Fielding—a counsel in the Washington office of Steptoe & Johnson LLP, where he is a member of the Government Affairs & Public Policy practice focusing on insurance and financial services legislative and regulatory matters—speculated that a tiff between the Office of the United States Trade Representatives (USTR) and the FIO may be stalling the document’s release.

“The FIO initially was going to have all responsibility on international regulatory agreements, and then under the statute, they changed the language to make sure that the USTR retained some authority. So they’re jointly responsible for some of these international agreements; but what does jointly responsible mean and who’s going to take the lead? I think that’s where the rub is coming in,” Fielding said Monday. The verbiage on these matters included in the FIO’s report may have been a bit strong for the USTR’s liking. 

Fielding reminded us that this is just rumor. After all, why would such a tiff over verbiage cause a six-month delay? And why is FIO Director Michael McRaith staying MIA until its release? The report, which thus far has only added to the questions surrounding the FIO, was meant to outline jurisdiction, focus and duty, many of which Fielding attempted to tackle Monday.

Some FIO duties are concrete, such as serving as the U.S. representative on International Association of Insurance Supervisors (IAIS), where it is on a subcommittee currently tasked with creating a formula for designating global systemically important financial institutions (GSIFI’s).

“Importantly, I think, is that FIO and the state insurance regulators are working to ensure that the GSIFI process is coordinated with the U.S. designation process, so that we don’t end up having a U.S. company designated as a GSIFI when they’re not designated as a SIFI here in the U.S.,” Fielding said.

This underscores the body’s broader international focus, which is its main purpose. “FIO has been dedicated as the principal U.S. voice on insurance,” said Fielding. “Until FIO, we did not have a unified voice representing the U.S. view on insurance, nobody had the authority to bind anything.”

To this end, the FIO has been working on Solvency II to make sure both sides, European and American, are asking what they can each do to tweak their systems, as well as the OECD and regulators in China, Japan, Brazil and other foreign markets with rather large barriers of entry.

On the domestic front, the FIO has worked with state regulators on “monitoring underserved communities and ensuring access to affordable insurance was one of the more explicit directives when outlining the FIO’s responsibilities.” “Shifting demographics” was a phrase mentioned several times at the IRI conference as the biggest challenge facing the industry. 

In working with state regulators and national bodies on this, McRaith’s experience as a state regulator has helped communication thus far. The Naitonal Association of Insurance Commissioners (NAIC) and the National Conference of Insurance Legislators (NCOIL), on the other hand, are a little more complicated to work with. Rhetoric from NCOIL, according to Fielding, has been “extreme and, frankly, unnecessary on some level.” The NAIC has had meetings with the FIO, but may not be mentioned in the final report, as the FIO may see regulators themselves as “counterparts.”

So if the FIO is already making so many friends, enemies and acquaintances they don’t care for much while sitting on international subcommittees, advising FSOC and assisting TRIA, it’s easy to see that the purpose of this first report has been outdated for some time now. We can already see how they will attack many of the vague initiatives bestowed upon them. The report now will likely serve as a political platform for McRaith’s inclusive, but assertive take on the FIO’s leadership.

“McRaith is proactive,” Fielding affirmed. Because the FIO is not a regulator and stands with very little substantive authority, we should “not be looking for a passive FIO, so don’t expect that.”

This points to underlying minutiae yet to be answered as McRaith continues to remain behind closed doors from demands for the report: What does “monitoring” underserved markets mean? How will McRaith gather information? How will he expect state regulators to respond to his findings? How will he represent domestic concerns internationally?

Regardless of the answers to these questions and when we may hear them, the FIO is moving. Months past the mandatory due date, actions are speaking louder than any words could. Let’s just hope its actions are more reliable than its deadlines.

Justin Stephani is associate editor for Insurance Networking News.

Readers are encouraged to respond to Justin by using the “Add Your Comments” box below. Healso can be reached at

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

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