NU Online News Service, Feb. 11, 1:10 p.m. EST
Members of the House Financial Services Committee are drafting letters to federal regulators asking that designation of any insurer as systemically risky be delayed until insurance experts are in place to help with the process.
The effort is being heavily lobbied by the insurance industry. Three key trade groups, the American Council of Life Insurance, the American Insurance Association and the Reinsurers Association of America, said the same thing earlier this week in a letter to Mr. Geithner, who heads the Financial Stability Oversight Council.
And officials of the Property Casualty Insurers Association of America asked the same thing in a letter sent to Mr. Geithner on Jan. 17.
Mr. Geithner, as Treasury Secretary, chairs the FSOC.
Rep. Barney Frank, D-Mass., a key player in the crafting of the financial services reform legislation, has already sent a letter to Treasury Secretary Timothy Geithner asking that the process be delayed until people with insurance expertise are in place.
Noting that no independent member has been appointed to the FSOC, as required by the Dodd-Frank law, and that an advisory member, the director of the Federal Insurance Office, has not been selected, Mr. Frank said in the letter, obtained by NU Online News Service, "I therefore urge that decisions affecting the status of the insurance industry with regard to the FSOC criteria be held off, if that is at all feasible, until the appropriate degree of expertise is brought to bear."
And he said in the letter that he also is asking other members of the FSC panel of both parties to send a similar letter to Mr. Geithner.
According to several industry officials, those being asked to sign the joint letter include Rep. Spencer Bachus, R-Ala., the new chairman of the panel, as well as Rep. Judy Biggert, R-Ill., chairwoman of the panel's Insurance, Housing and Community Affairs Subcommittee; and Rep. Luis Guitierrez, D-Ill., ranking minority member of the subcommittee.
Also sending a letter are Rep. Ed Royce, R-Calif., and Rep. James Himes, D-Conn.
The effort was launched by the ACLI and AIA, who said in their joint letter to Mr. Geithner that classification of insurers should be delayed until the independent member of the Financial Stability Oversight Council, having insurance expertise, is nominated by the president and confirmed by the Senate and the director of the Office of the Federal Insurance Office has been selected by the Treasury secretary.
They suggested that any FSOC action involving insurers be delayed until the agency has proposed qualitative and quantitative standards that it may use to assess insurers, and has provided the insurance industry and the public with an opportunity to comment on such standards.
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