Illinois Insurance Commissioner Michael T. McRaith, has been selected by the Secretary of the Treasury as the first Director of the Federal Insurance Office (FIO), which was created by the Dodd - Frank financial reform legislation instituted last year. He begins his new duties in June. Commissioner McRaith has served as the Illinois Insurance Commissioner since 2005 and was previously a private practice attorney representing insurers and financial institutions.
As Director, he will have a non-voting seat on the Financial Stability Oversight Council. He brings to the post the benefit of substantial experience with both the regulation of insurance and the business of insurance.
The FIO has no regulatory authority over the business of insurance. However, the FIO is charged with specific reporting obligations, including an annual report to the President and Congress on the insurance industry and, significantly, a report due not later than 18 months from enactment of the bill on “how to modernize and improve the system of insurance regulation in the United States.” One of the specific issues the report must address is potential federal regulation of insurance. The FIO’s functions include:
- Monitoring all aspects of the industry, including identifying any aspects of insurance regulation that could contribute to a systemic crisis in the insurance industry or the U.S. financial system, and the extent to which affordable insurance is available to under-served communities and consumers, minorities, and low and moderate income groups.
- Recommending to the Financial Stability Oversight Council that an insurer and its affiliates be subject to regulation as a nonbank financial company by the Federal Reserve Board of Governors.
- Assisting the Secretary of the Treasury in administering the federal Terrorism Insurance Program.
- Coordinating and developing federal policy on international insurance issues, including representing the U.S. in the International Association of Insurance Supervisors, assisting the Secretary of the Treasury in negotiating international agreements on insurance or reinsurance and determining whether state insurance measures are preempted.
- Consulting with the states and their insurance regulators on insurance matters of national and international importance.
The FIO’s oversight extends to all lines of insurance except health insurance, long-term care insurance, and crop insurance under the Federal Crop Insurance Act.