The National Association of Professional Insurance Agents (PIA) is disappointed that the FIO, in its narrative regarding the 2007-2009 financial crisis, does not appear to take into account the report issued by the Government Accountability Office (GAO) on June 27, 2013. The FIO report sails by the GAO's conclusion that the state insurance regulatory system worked well to help mitigate the negative effects of the crisis on the insurance industry. A truly objective report would have referenced the GAO study's conclusions.
In arguing for more uniform regulation, the FIO report cites only one recent example to make its case: AIG. However, we believe it significantly misreads, misinterprets and avoids making the difference between the AIG insurance operations versus the AIG private capital London affiliate under which the originating matter arose. Thus, FIO confuses what actually happened regarding AIG's insurance operations versus its capital investment tradition operations.
The report also appears to give a pass to the regulatory failures admitted by the Office of Thrift Supervision (OTS) involving a non-insurance unit of AIG which generated the initial problems. These failures ultimately led to OTS, then a federal financial instrumentality, being dissolved.
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