Next Steps in Federal Regulation of Insurance Taken Today
11 December 2009
Today, the U.S. House of Representatives passed The Wall Street Reform and Consumer Protection Act
(H.R. 4173) that creates a Federal Insurance Office. Title VI of the Act, outlines three specific objectives of the new group: 1. provide a source of industry expertise in the federal government, 2. represent the U.S. in international insurance issues, and 3. promote stability in the financial system through greater knowledge at the federal level. The act also deals with the regulation of systemic risk. It establishes an emergency fund, funded by major financial companies (over $50 billion in assets), which would be tapped if needed.
What does this mean for insurers? For the largest companies, increased costs from the additional assessments. For all insurers, it will require additional work to comply with the new information requests. Practical steps that can be taken now to prepare for these inevitable requests are available in the Celent Boardroom Series: US Federal Regulation of Insurance: Are We Ready?, posted on the main Celent website.
The bill now goes to the Senate for debate. I can give you 180 billion reasons why the insurance-related parts will pass.