Dodd-Frank Act (HR 4173) Passes U.S. Senate
Written by Marlo .
The Dodd-Frank Act has passed the U.S. Senate with enough votes to avoid yet another Republican filibuster threat.
The Act, at Title V, includes substantial insurance industry reforms. The most significant is the establishment of a Federal Insurance Office (FIO) as a part of the Department of Treasury. The Secretary of the Treasury is also given rule making authority to implement/delegate the new duties of this office. The Act also establishes that surplus and reinsurance insurers will be subject to the regulation of their “domicile” instead of having to comply with multiple state requirements.
The Act seems to place “international” insurance issues solely with the new FIO, although my “lawyer sense” detects some substantial debate to come as to what constitutes “international” insurance issues. International insurers seem upbeat with Sean McGovern, Lloyd’s Director and General Counsel stating, “We welcome the passage of the Dodd-Frank Act and look forward to working with the proposed Federal Office of Insurance as it develops its policy on international insurance issues.”
Industry reaction seems mixed based upon what I have read today. There is optimism that some federal regulation will eliminate the costs of multi-state compliance with the hope that such savings pass down to insured. While other insurer spokespeople have voiced concern over the establishment of another federal department.