PIA's Call to Defund FIO Regulation Study Sparks Widespread Industry Reaction
PIA National's call on Congress to defund a study of insurance regulation slated
to be conducted by the Federal Insurance Office (FIO) is drawing reaction from
throughout the industry.
On January 18, PIA National issued a press release calling for defunding the
study because the FIO, as a federal agency, cannot be objective when it comes to
studying and making recommendations on how insurance is regulated. "Having the
FIO report on, as the law currently states, 'the costs and benefits of potential
federal regulation of insurance across various lines' creates an inherent
conflict of interest. It assures a biased result, because it asks federal
regulators if they believe in federal regulation. Of course their answer will
be 'yes.' Congress needs to defund this Trojan horse for federal expansion and
Mutual insurers share PIA's concern. "We've been concerned about the study from
the moment it was introduced. In Washington, it seems any office asked to study
itself will unfailingly determine that it needs more authority, a bigger staff
and, certainly, a bigger budget," Matt Brady, media relations director,
National Association of Mutual Insurers (NAMIC), told Insurance Journal. Brady
said NAMIC has been .very vocal about the need to ensure the FIO stays true to
that intent and prevented from expanding beyond it."
Not surprisingly, the American Insurance Association (AIA) disagreed with PIA.
A spokesperson said, "Any suggestion to defund this essential study is out of
touch with the challenges facing the industry," and went on to add that "We
must increase the federal government's capacity to address insurance
PIA strongly opposes federal insurance regulation and supports the current
national system of state-based regulation. Insurers have been split on the
issue. AIA has supported giving insurers the option of being regulated at the
federal or state level. NAMIC and the Property Casualty Insurers Association
of America (PCI) have opposed federal regulation and warned about potential
duplication of state regulatory efforts by any federal office.
All the major insurance industry publications prominently reported PIA's
call to defund the FIO study, with many getting reaction from others in the
industry and fielding comments on their discussion boards. Listed below are
links to these articles.