Conference risk?: ‘Team USA’ a no-show at Moscow IAIS

The Basel-based standard setter for insurance regulation held its 11th annual global seminar in Moscow toward the end of July. It was notable for its high-level discussions on   on the high-wire implementation of an agreeable international insurance capital standard and systemic risk,  for a newly-published paper on climate change’s insurance sector  risk  — and for the lack of American regulators in attendance.

Advancing American interests in international financial regulatory negotiations and meetings is one of the Trump Administration’s “core principles” in “Executive Order 13772  regardign fianncial system regualtion, released Feb. 3, 2017.

Members of the National Association of Insurance Commissioners, representing each U.S. state and territory, U.S. Federal Reserve Board and the U.S. Treasury’s Federal Insurance Office, collectively referred to by some affectionately as “Team USA,” are very active and at times, high-ranking, members of the International Association of Insurance Supervisors. However, their principals and staff, for the most part, if not in total, did not attend the conference, as they have for other such IAIS global seminars in world capitals like London and Budapest, attendees said.

Sources representing government officials answered uneasily, or  cited security concerns, but did not specify if they were digital, physical or otherwise. The U.S. absence was definitely noted, one attendee told the Rider from the meeting, which was held at the Hyatt Petrovsky Park.

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NAIC-paid consumer advocates also did not attend the meeting, one citing family schedule conflicts as the meeting does occur in summer.

The U.S. is usually no slacker at the IAIS in participation, and sends dozens of its commissioners and staff  at times to far-flung foreign metropolises to partake in these discussions and boasts state regulators who help lead influential committees.

Nor is the U.S. unnoticed when it comes to size of dues. The 2016 IAIS public document on annual member fees reveals the U.S. paid a total of 458,300 CHF in dues to the IAIS for 2016, with the NAIC fee as the lion’s share of that, at 408,300 CHF. The CHF, or Swiss franc, is currently worth $1.01 U.S. dollar.

The Fed and FIO each paid 25,000 CHF in dues for 2016, the document shows. Most other jurisdictions appear to pay 25,000 CHF or less, with some, like Switzerland, China, China, Hong Kong, Brazil and Austria paying double that, while the next-highest fee structure appears to be 86,400 CHF for Canada, one regulatory agency in Australia, the U.K.’s Prudential Regulation Authority, Chinese Taipei and Italy, for example. Some countries have more than one agency member, but total dues for about any  jurisdiction other than the U.S. is well under 200,000 CHF. Russia’s IAIS dues stood at 31,500 CHF for 2016.

The annual IAIS seminar came at a tense time in relations between the U.S. and Russia, to be sure.  U.S. intelligence community has concluded Russian state actors have interfered in the U.S. election process and are still trying to exert influence. There have been high-profile indictments and plea deals in a collusion and influence investigation, while U.S. President Trump had openly bragged about a closed meetingwith Russia’s powerful leader, Vladimir Putin, in Helsinki, the week prior.

The Moscow IAIS program featured top regulators from the U.K., Japan,  Italy, Taiwan, Mexico, Australia, Bermuda, Russian, of course, along with the World Bank, and Jonathan Dixon, the IAIS secretary-general.

Stakeholders from U.S. companies and consulting firms  did attend the July 23-27 meeting, with major U.S. life insurance company representatives there, as well as their trade group, the American Council of Life Insurers, sources noted.

For instance, MetLife’s head of regulatory policy and global government relations, Joe Engelhard,was listed as a speaker on a July 26 panel with Alberto Corinti, chair of the  IAIS’ Macroprudential Committee and a board member of the Institute for the Supervision of Insurance in Italy about mitigating systemic risk. The panel was moderated by Victoria Saporta, chair of the IAIS executive committee and executive director of the Prudential Policy Directorate at the Bank of England.

Stateside, the conversations will continue near the harbor of Boston.

On Aug. 4, IAIS secretariat, Romain Paserot, is scheduled to hold an early evening Q&A session with interested parties at the NAIC’s summer national meeting, according to the U.S. insurance regulatory standard-setter’s meeting agenda. Paserot oversees capital and solvency for the IAIS, as well as its operations, according to an online IAIS flowchart.

Only a couple of hours before Paserot takes questions,  the NAIC’s ComFrame Development and Analysis Working Group chaired by Connecticut Commissioner Katharine Wade, is scheduled to update the group in the vaunted insurance capital standards as well as on the continued work for the development of a common framework for supervision of internationally active insurance groups. ComFrame was a central agenda item at the Moscow global seminar.

 Paserot is expected to help lead these discussions, according to a preview of the agenda online.


PCI’s Sampson will be at helm of combined p/c lobbying giant

Update Dec. 21, 2018 from my article at P&C Specialist:

P&C Trade Groups Plan Merger to Create Lobbying Powerhouse

A summer update on a June 2018 post about the creation of a new lobbying and industry advocacy powerhouse, P/C Trades in Merger Talks:

The leader of the combination of the American Insurance Association and the Property Casualty Insurers Association of America will be longtime PCI CEO David Sampson, according to an Aug. 1 memo to insurance executives from Sampson and PCI Board Chairman Kurt Bock, CEO of PCI member company Country Financial.

Sampson will be CEO of the merged property/casualty behemoth, “with the goal of retaining and integrating key staff of both organizations,” according to the memo.

However, the board of the combined entity will be filled with current board memberships of AIA and PCI, and PCI’s leaders said they expect the combination to right-side itself over about three-year process, according to the memo and an accompanying joint recommendation note.

PCI is headquartered

in Chicago but has a large office and presence in Washington, where it is close to Congress; AIA is based in Washington DC. Both are very active at the state and regional level and send multiple representatives to meet with state regulators and legislators as well as U.S. Congresspersons.

In the name of equanimity,  the powerful new entity’s  executive committee of up to 12 members would equally represent both trades for the first four years, according to PCI’s memo and attached note. These first years are referred to as “the trust building period” by PCI, which says on its webpage it represents 1,000 member companies and 340 insurance groups writing 38% of the U.S. home, auto, and business insurance market with $245 billion in premiums per year.

In contrast, AIA states on press releases its membership is comprised of more than 330 companies, collectively writing more than $134 billion in annual premiums.

The combined group, not accounting for overlap, merged entities or those  companies who leave, if any, would total companies who together write $379 billion in annual premium.

Helming the combined entity as chairman of the board  in a two-year rotation will be current AIA Board Chair and Munich Re America CEO Tony Kuczinski, followed by a new PCI board chair, PCI told its CEO membership in a memo. Of course, this is subject to the successful approval and completion of a merger. The note championed Kuczinski and Munich Re as “highly-regarded partners of many PCI companies.”

Back in mid-June, PCI  leaders acknowledged they had been exploring a potential merger with AIA, which is now headed by industry veteran John Degnan, who took the president/CEO role last year after a long career.

PCI and AIA representatives did not immediately return an email inquiry on its alert to members.

Another major p/c trade group, the National Association of Mutual Insurance Companies bills itself as the largest U.S. property/casualty insurance trade association, and its numbers are larger than PCI’s although many of its companies are mutuals and smaller in size, or less global. Indianapolis-based NAMIC represents more than 1,400-member companies and 40% of the p/c market in the U.S., with companies writing  $253 billion in annual premiums.

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