More Federal Oversight Of Insurance Urged By Treasury

Insurance regulation in the U.S., now largely in the hands of the individual states –  most of whom would like to keep it that way – will get a makeover if recent Treasury Department recommendations are followed. The report calls for a hybrid system, with federal regulators handling anything involving international insurance and taking a greater role in mortgage insurance, the collection and use of personal data to set prices, and the regulation of captives insurance companies. The report also calls for development of uniform capital requirements, better methods for winding down insolvent insurers, and tighter reinsurance requirements. The official who spearheaded the report, Michael T. McRaith, director of the Treasury’s Federal Insurance Office, pointed to the collapse of AIG and the 2008 federal bailout as evidence that state regulators were not in a position to address  what has become a complex international insurance landscape.