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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 encroachment."

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 related issues."

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.

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AFCO Capital Premium Financing CRC Group Gulf States Insurance Co.
LRA Workers' Comp National General, an Allstate company Stonetrust Insurance
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