Federal Insurance Office released long-awaited insurance industry report
The U.S. Department of the Treasury‘s Federal Insurance Office has released a highly anticipated report concerning the insurance industry. The report was initially scheduled for release in January of 2012, but this release was delayed in order for the Federal Insurance Office to take better account of emerging trends in the insurance industry and provide better insight on how the industry has evolved over a relatively short period of time. The agency is tasked with providing these types of reports on an annual basis.
Insurance industry performing relatively well across all sectors
The report primarily focused on the financial performance of several sectors within the insurance industry. Some of these sectors, such as homeowners insurance, have shown some turbulence in recent months and the report provides some insight on how this sector manages risks and works to mitigate losses. Overall, however, the insurance industry is doing relatively well, but many insurance companies have concerns when it comes to new regulations and how these may affect overseas business.
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Insurers express concern over new regulations
U.S. insurance companies are beginning to express worry over how federal regulations will affect subsidiaries based in Europe. These European insurance divisions are subject to higher requirements than those based in the U.S., the most important of which are capital requirements. There are potential regulations taking form in the U.S. that would increase the capital requirements throughout the insurance industry, which could make it significantly more difficult for overseas subsidiaries to continue operating due to the higher costs that insurers will face.
Lawmakers may take steps to aid insurance industry
The U.S. and European Union are the largest trading partners in the world when it comes to insurance services. U.S. insurers are eager to ensure that they are not put at a competitive disadvantage when it comes to their overseas counterparts. Federal lawmakers will be reviewing the report from the Federal Insurance Office in the future in order to determine what actions can be taken to create a better environment for the insurance industry without making significant regulatory sacrifices.