Nearly two years ago, a study released by the Property Casualty Insurers Association of America (PCI)
Eighteen months ago, the Financial Stability Oversight Council (FSOC) issued five “
Last week, MetLife chairman, president and CEO Steve Kandarian
In the past two years under Dodd-Frank, not much seems to have happened. Sure,
But the most common thread of discussion through the past two years has undoubtedly been one of simultaneous confidence in the industry and frustration when it comes to likelihood of more regulation, which is why patience is running a little thin. Not to mention the fact that many insurers have already been trimming operations of their own volition after the economic crisis; in particular, larger insurers who have divested units and separated brands, with the hope of avoiding any potential dual regulation that could pop up down the line. Yet, the lack of answers persists.
“The longer things remain uncertain, the more pressure that puts on the industry,” said Howard Mills, director and chief advisor of Deloitte’s insurance industry group and former New York State Insurance superintendent. “It’s sort of an artificial cloud hanging over the industry’s head; what’s going to happen with SIFI designations, what’s going to be in the FIO report? There’s just so much uncertainty out there.”
The Federal Insurance Office (FIO) is a tangential pipeline of frustration for insurers, as the unit created by Dodd-Frank has been all but silent publicly as its official report is almost 18 months late. Seemingly because it knew it couldn’t please all parties, the group has moved on and begun working with the various organizations putting the rules together without presenting a game plan to the industry it’s supposed to be representing.
“I think the industry would like to have clarity, even if it’s a regulatory announcement or a determination that they don’t agree with—it’s better to know than to not know,” said Mills. Before explaining that, when news does surface, it probably won’t be agreeable: “I think there’s an element of politics here, and I’m not speaking specifically with regard to MetLife, but just generally speaking, there’s a political expectation that some insurers are probably going to get swept up into this—not justifiably on the merits, but it’ll be hard for the industry to escape the whole.”
So while insurers have had plenty of time to adjust operations accordingly (or at least make plans to) and have likely come back to waiting, the usefulness of the eventual announcements reasserts itself at the center of the debate.
Indeed, Mills summed up the regulatory updates, and therefore the last two years, succinctly when he ended our discussion by saying: “It’s getting a little ridiculous in terms of the pace.”
Justin Stephani is associate editor for Insurance Networking News.
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