Washington D.C. – Five years after the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, it is increasingly clear that the landmark financial reform bill has affected insurance regulation in profound and unexpected ways. That is why the Bipartisan Policy Center (BPC) today is announcing the launch of an insurance task force to assess the impact of these new rules and identify ways to improve and modernize insurance oversight. The Insurance Task Force will be co-chaired by Republican William H. McCartney, former president of the National Association of Insurance Commissioners and Nebraska state insurance director, and Democrat Robert E. Litan, longtime regulatory policy scholar and former Clinton administration official.
“The Dodd-Frank Act intended to create a framework for twenty-first century banking regulation while leaving insurance regulation largely in state hands. However, Dodd-Frank has impacted insurance regulation far more than most predicted, and those insurers it has affected are caught up in a regulatory system largely designed for banks,” said McCartney.
“Smart, sensible measures are needed to improve insurance regulation at the state, federal and international levels.”
BPC will assess how the changes precipitated by the implementation of the Dodd-Frank Act have affected the insurance industry. An op-ed, running today in The Hill, provides a fuller explanation of the project’s mission. However, the task force will spend the coming months holding a series of private stakeholder roundtables and hosting public events to gather insights into this complex issue. Key topics to be explored include the proper role of:
- The Federal Insurance Office (FIO), the Federal Reserve, the Financial Stability Oversight Council (FSOC) and the federal governmental presence in insurance regulation, and whether to create an optional federal charter for insurance companies;
- The state insurance regulatory system (e.g., solvency regulation, state guaranty funds and uniform standards);
- The global insurance regulatory system as it relates to U.S. decisions on insurance regulation, global cooperation and coordination on insurance regulation; and
- Consumer protection regulation to help ensure that families and businesses have access to safe and affordable insurance products they need and want.
The Insurance Task Force is part of BPC’s Financial Regulatory Reform Initiative, which has been examining what has been working and not working with Dodd-Frank and ways to improve the Act. BPC will publish a series of issue briefs on key topics and culminate with the release of a suite of policy recommendations. “What is crystal-clear is that insurers and banks have very different business models and demand very different regulatory policies,” said Litan. “We hope our policy recommendations will lay the groundwork for meaningful reforms that will improve oversight, while allowing the insurance market to function efficiently and serve its vital role in the nation’s economy.”
The Insurance Task Force will build on BPC’s previous work, which has recommended ways to improve the Consumer Financial Protection Bureau, the Volcker Rule, systemic risk regulation, the nation’s regulatory infrastructure and how to end the “too-big-to-fail” problem. For more information, stay tuned to bipartisanpolicy.org