Boardroom Series: US Federal Regulation of Insurance: Are We Ready?
Celent, a Boston-Based financial research and consulting firm, is launching a new client resource called the Boardroom Series. These monthly briefs explore the current challenges faced by insurance companies, helping C-level executives prepare for the next "hard question" their Boards of Directors are likely to ask. Each brief focuses on a single question, provides Celent's view of the issues behind the question, and defines specific action steps that will position a carrier to deliver an effective response.
The first installment of this series is US Federal Regulation of Insurance: Are We Ready? The recent Obama administration white paper on financial regulation signals increased US Federal Government involvement in the regulation of insurance. However, even with the many details in the announcement, the scope and shape of this oversight is still uncertain. Which parts of financial services operations will constitute "systemic risk"— banks, life insurers, property/casualty, all of the above? What effect will the proposed entities—the Office of National Insurance within the US Treasury Department and the Consumer Financial Protection Agency—have on reporting requirements and day-to-day operations? To what level will federal requirements be coordinated with existing state structures?
"This report gives direct, actionable steps that will allow insurers to determine their state of readiness for increased Federal regulation," says Mike Fitzgerald, senior analyst and author of the report. "Organizations can take proactive steps now that will increase the efficiency and effectiveness of their response."