G.7 Schwartzman & Ross
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Two Duties of FIO
- Collect information from large insurers. Small insurers may be exempted fromt his requirement.
- Monitor most lines of insurance (exceptions include health, LTC, and crop).
Purpose of FIO Director's Report
Assess current state regulatory system and recommend improvements to regulation of insurance.
Consequences of FIO Director's Report
Recommendation could affect the future of insurance regulation.
Three Arguments for Keeping State Regulation
- If it ain't broke, don't fix it.
- High cost to shift to federal regulation.
- Shared authority would add new layers of regulations and costs.
Three Arguments for Moving to Federal Regulation
- Cheaper and for multistate insurers to comply with one law than 50 laws.
- Easier for alien insurers to do business in US.
- Need to take global view when analyzing future cricis scenarios.
Two State-Based Insuranec Reforms from Dodd-Frank
- Greater access to market for nonadmitted insurance - Surplus lines insurer/broker must only be licensed in home state. Premium taxes must only be paid in home state. Less stringent diligent search requirement.
- Ease of reinsurance regulation - Reinsurer must only satisfy requirements for state in which it is domiciled.
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