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Michael McRaith, Director, Federal Insurance Office, or FIO, gave his thoughts on the role of the FIO at the Property/Casualty Insurance Joint Industry Forum On January 10. 2010.  Highlights of Mr. McRaith’s speech are extracted below.

According to Mr. McRaith, “a key responsibility of the FIO is to “monitor all aspects of the insurance industry.” Of course, different people have offered different views about what monitoring will look like and what constitutes an “aspect” of the insurance industry. 

Circumstances will largely influence our focus at times, but it definitely does not mean that FIO will sit idly by while the world spins. 

FIO is poised to be flexible enough to not only be responsive to current events affecting the insurance industry, but also to take the lead in facilitating dialogue and direction regarding the insurance sector both nationally and internationally.

FIO will be increasingly well-suited to be engaged and assertive, when necessary, to offer views, leadership, and guidance on insurance in the United States. We intend to become a source of expertise within the federal government, expertise that understands all aspects of the marketplace, regulation, and international matters. 

Of course, much of our effort will involve data analysis.  I understand some in the industry question the need for FIO’s authority to ask for and receive information.  Some have reported, in fact, that something of a cottage industry has developed around concerns that FIO will duplicate the data and document requests that insurers receive from state regulators.

These concerns are not well-founded.

The law is clear that FIO must first seek any information it needs from a public source or from another regulator, including the states. Only if the information is unavailable from either of those sources does FIO then directly ask an insurer for information.

In that same vein, FIO’s subpoena authority is an important component of our mission.  Remember that authority will be exercised only if (1) the information is not publicly available, and (2) the information is not available to FIO from a regulator. 

Subpoena authority is an authority to use as a last resort for critical information that the office may need, and is intended to be used only in the absence of another viable source to obtain that information.

We are aware of the reasons that the statute explicitly defines when information can be requested directly from an insurer, and I respect those reasons.”

Check frequently for updates on the Dodd-Frank Act and other important securities law matters.

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