Sullivan, a Republican, stepped down under fire as insurance commissioner in 2010 after approving a large health insurance rate increase for Aetna that earned the ire of consumer groups and the Department of Health and Human Services. He served for three years, and was a former top official at the Hartford, serving in various positions there before being named insurance commissioner in 2007 by then Gov. Jodi Rell.

His last post at the Hartford was in the property and casualty area, but as Connecticut insurance commissioner he chaired the NAIC's Life Insurance and Annuities Committee.

According to an e-mail to colleagues in the insurance sector, Sullivan will represent the Fed at all domestic and international insurance forums.

"I am excited to be joining the Fed and there is a lot of work to be done given their statutory authority as consolidated regulator for the designated insurer non-bank (Systemically Important Financial Institution) SIFIs and the insurer owned SLHCs (Saving and Loan Holding Companies)," Sullivan says in an email.

Connecticut's current insurance commissioner, Tom Leonardi, says regarding the appointment, "The Federal Reserve Board has made a solid appointment in choosing Thomas Sullivan, who has keen regulatory and industry insight. He understands the importance of state-based regulation, and the difference between banking and insurance. This is a great step forward that will benefit consumers and insurers."