NU Online News Service, Sept. 13, 3:05 p.m. EDT

WASHINGTON–The National Association of Mutual Insurance Companies (NAMIC) is making clear that it believes it was Congressional intent for the Federal Insurance Office (FIO) created under the financial services reform law to be only a clearinghouse for insurance information–and not a regulator.

In a letter sent to the Treasury Department on Friday outlining some concerns with the implementation of the FIO, NAMIC said it believes the final financial services reform bill established the FIO with "protections in place to prevent the office from becoming a de factor regulator."

The legislation "also includes explicit language protecting the state-based regulator of insurance," the letter said.

The letter was signed by Charles Chamness, NAMIC president and CEO.

"NAMIC believes the inclusion of this language recognizes that it is essential to avoid creating a dual regulatory scenario when developing and implementing the FIO," the letter said.

The letter also addressed the power of the FIO to make data calls and request document production.

The letter said NAMIC is concerned with the potentially duplicative information gathering and collection requirements placed on insurers with the creation of the new Office of Financial Research (OFR).

Mr. Chamness said in the letter that duplicative data calls are costly and time-consuming endeavors for insurers–particularly small insurers with few employees and little resources.

"Additionally, insurers regularly submit information to state regulators on all aspects of their operations. NAMIC has long supported and encouraged coordination of information requests among the states," the letter said.

"Creating an additional reporting layer would go against the goal of simplification and coordination," Mr. Chamness said.

"NAMIC recognizes the need for information on insurance at the federal level but believes that collection of this information can be achieved working through the systems and processes already in place," he said.

For these reasons, the authors of the bill saw fit to require the FIO to coordinate with state regulators prior to collecting data or information and limited the office's ability to request information directly from insurers, the letter said.

Mr. Chamness said that NAMIC urges Treasury to maintain these important safeguards in implementing this office.

Regarding the OFR, Mr. Chamness voiced the same concerns.

"It is imperative that the OFR be required to coordinate with the FIO to acquire any information on insurance that it needs," he said.

"Such an implementation would prevent any duplication of efforts and save consumers from additional costs," he added.