On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (H.R. 4173). The Act directs the U.S. Treasury Department to create a Federal Insurance Office (“FIO”) The FIO has the authority to monitor all aspects of the insurance industry, establish Federal policy on international insurance matters, serve as a liaison between the Federal government and the several States regarding insurance matters, and serve as an advisory to the Treasury regarding the export promotion of United States insurance products and services. The scope of the FIO’s authority extends to all lines of insurance, except health insurance. Also excluded from the FIO’s authority is long-term care insurance, except long-term care insurance that is included with life or annuity insurance components.
This is a departure from an earlier bipartisan proposal by Congressmen Ed Royce (R-Calif.) and Melissa Bean (D-Ill.) that would have enacted a federal insurance charter designed to mandate a national framework of state based regulation or market conduct, licensing, the filing of new products and reinsurance.
The FIO is seen as a “win” by many State Insurance Commissioners who had been advocating for closer collaboration with the federal government in the regulation of insurance companies.