The Federal Advisory Committee on Insurance (FACI) meets today, Aug. 7, in Washington, with a slate of new members. For the first time, industry participants outnumber state regulators.
The agenda is broad, including the first time the committee will meet to discuss the FIO report, How to Modernize and Improve the System of Insurance Regulation in the United States, issued in December.
There are nine high-level insurance or broker industry members, including two from non-U.S.-domiciled holding companies, two academics, the addition of a state legislator with insurance interests, one consumer advocate and eight state insurance regulators. State regulators number eight for a total of 21 members.
FIO Director Michael McRaith oversees the committee, which will again be chaired by the CEO of Marsh & McLennan Cos., this time in the person of Dan Glaser rather than the retired Brian Duperreault.
Originally, half the slots were for state regulators.
Seven are original members of the 15 named almost three years ago, when industry members numbered six participants, state regulators seven, with the addition of one each of an academic representative and a consumer advocate. A few represent the same firms or entities as their predecessors.
The FACI is also scheduled to review of the renewed charter of the FACI and give a status report on international developments. McRaith is a member of the International Association of Insurance Supervisors, and Pennsylvania insurance Commissioner Michael Consedine chairs the National Association of Insurance Commissioners (NAIC) International Committee (G) as well as NAIC vice president. The G Committee is scheduled to have a conference call to discuss, among other things, technical issues with the IAIS’ Basic Capital Requirements (BCR) consultation paper at about the same time as the FACI meeting.
There will also probably be an update on the The EU-U.S. Insurance Project, in which other FACI members are involved. By end 2014, the steering committee of the project has proposed to evaluate the use of a covered agreement to achieve the group supervision stated objectives such as working towards achieving greater comparability between groups in relation to an overall group solvency assessment.
One original and continuing member, Benjamin Lawsky, New York’s Superintendent of Financial Services, recently wrote to members of the Financial Stability Oversight Council, which include McRaith as a nonvoting member, asking for careful consideration in the Council’s review of MetLife as a potential systemically important financial institution and noting that MetLife’s life insurance businesses already are “closely and carefully regulated” by the state of New York and other regulators.
The domestic insurers named as SIFIs so far by the FSOC, Prudential Financial and AIG, now have executives on the FACI, as does Allianz, deemed a global systemically important insurer, as designated by the IAIS/Financial Stability Board (FSB.) Prudential and AIG are also G-SIIs, as is MetLife. Only MetLife, expected to be named a potential SIFI by FSOC soon, is not represented on FACI. Prudential Financial is now overseen on a consolidated basis by the Boston Federal Reserve Bank and AIG by the New York Fed.
The original FACI charter called for the FACI to consist of not more than 15 members. The duties of the FACI are “solely advisory and shall extend only to the submission of advice and recommendations to the FlO, which shall be non-binding,” to the original charter. No determination of fact or policy shall be made by the Committee, according to this 2011 charter, which was renewed in August 2013 for another two years.
FACI has met in person, in public meetings, about half a dozen times since its first meeting in March 2012, and weighed in heavily on the topics of availability and affordability of insurance and the use of captive arrangements by insurers, in open discussions which sometimes turned tense as when former FACI member Thomas Leonardi sparred with McRaith on whether the investigation of captives was even necessary by FACI and FIO. There were also forays into catastrophes, the national flood program and Superstorm Sandy, and an overall broad commitment to look into the retirement and aging of the world’s insurance-buying public.
However,the FACI has seemingly been dormant for at least half a year, although phone calls are not made public.
The 21 individuals (Asterisk denotes original member)appointed today to the Federal Advisory Committee on Insurance include:
· Gary Bhojwani, Chairman of Allianz of America
* Birny Birnbaum, Executive Director, Center for Economic Justice
· Elizabeth Brown, Professor, Georgia State University
* Michael Consedine, Commissioner, Pennsylvania Insurance Department
· Brenda Cude, Professor, University of Georgia
* Jacqueline Cunningham, Commissioner, Virginia Bureau of Insurance
· John Franchini, Superintendent, New Mexico Office of the Superintendent of Insurance
* Loretta Fuller, CEO & CFO, Insurance Solutions Associates
· Nicholas Gerhart, Commissioner, Iowa Insurance Division
· Daniel Glaser, President & CEO, Marsh & McLennan Companies (Chair of the Committee–was Brian Duperreault, retired CEO of Marsh)
· Mark Grier, Vice Chairman, Prudential Financial, Inc.
· David Herzog, EVP & CFO, American International Group, Inc.
· George Keiser, Representative, North Dakota House of Representatives
· James Kelleher, EVP & Chief Legal Officer, Liberty Mutual Insurance
* Scott Kipper, Commissioner, Nevada Division of Insurance
* Benjamin Lawsky, Superintendent, New York Department of Financial Services
· Theodore Mathas, Chairman, President & CEO, New York Life Insurance Company (was Michael Sproule from NY Life)
* Sean McGovern, Chief Risk Officer & General Counsel, Lloyd’s of London
· Julie McPeak, Commissioner, Tennessee Department of Commerce and Insurance
· Franklin (Tad) Montross, Chairman, President & CEO, General Re Corporation
· Theodore Nickel, Commissioner, Wisconsin Office of the Commissioner of Insurance