WASHINGTON BUREAU -- The American Council of Life Insurers (ACLI) is calling for Congress make sure the new Federal Insurance Office (FIO) has enough funding to help U.S. insurers compete in the international insurance marketplace.
House budget cutters have been fighting for smaller government.
The ACLI, Washington, believes the FIO "needs to be fully staffed and funded" to do its job, ACLI General Counsel Gary Hughes said today at an insurance oversight hearing organized by the Insurance, Housing and Community Subcommittee of the House Financial Services Committee.
Despite the existence of a strong state-based insurance regulatory system in the United States, "there is a pressing and immediate need for the FIO to engage in the representation of U.S. national interests and in so doing fill what is essentially an 'international insurance representation gap,'" Hughes said.
The ACLI began trying to draw attention to the gap in 2001, when it noted a disconnect between regulators in the United States and its major trading partners, Hughes said.
Western European countries, Japan and South Korea "were reorganizing their financial regulatory services into a single unified Financial Service Authority model combining banking, securities and insurance supervisors into an integrated whole," Hughes said.
That shift created problems when regulators in those countries were working with U.S. regulators on financial services regulatory coordination and cooperation initiatives, Hughes said.
"The scope of their understanding of financial services included all sectors, and the U.S. was continually forced to clarify that under U.S. representation financial services included all sectors except insurance," Hughes said.