As in its section on asset management (see Client Report ASSETMANAGEMENT7), the new Treasury report’s plans for U.S. insurance regulation adheres closely to many long-pending industry goals, espousing the views of the sector studied and, in this case, also of state regulators with whom the FRB and even Treasury have long been at odds. Now, Treasury is a very strong advocate for the state-based model of U.S. insurance regulation, clearly rejecting the optional federal-charter approach long advocated by banks and once championed by the Bush Administration’s Treasury Department (see FSM Report CHARTER16). Siding also with state insurance regulators, Treasury has decided to rein in the Federal Insurance Office established under Dodd-Frank, with FIO’s new and more limited responsibilities sure to be among the first action steps taken in response to all of Treasury’s reports because FIO directly reports to the Treasury Secretary.
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