Thomas Sullivan, the former Commissioner in Connecticut, has now taken on the position.
The Federal Reserve has just announced that it will be hiring the former Insurance Commissioner from Connecticut, Thomas Sullivan, in order to take the lead of the oversight of the industry, particularly in terms of the largest firms.
The goal is to add his experience to help to address the claims that the central bank does not have knowledge of that business.
Thomas Sullivan held the position as Commissioner in Connecticut throughout the financial crisis and was able to guide the state’s insurance industry through that difficult time. A spokesperson for the Federal Reserve explained that Sullivan would be taking on a new senior advisory position and will lead oversight for some of the largest insurers in the country. He will also be representing the Federal Reserve in international discussions regarding the regulations that will be laid down for the industry.
The insurance industry experience offered by Sullivan will represent an important perspective for the Fed.
It is rare for a senior official to be taken on when he or she has maintained a considerable experience in a field in which there have been accusations by critics that the Federal Reserve is lacking knowledge and where it is adhering to a more bank-focused perspective. The Dodd-Frank law, which passed in 2010, gave the Reserve the authority to be able to regulate large nonbank financial companies such as insurers, provided that regulators deemed them to be of systemic importance. This authority included being able to dictate the capital requirements for those firms.
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Since that time, MetLife, Prudential Financial Inc., and other large players in the insurance industry have found themselves subject to what they call bank-like capital rules that had the potential to bring about negative business outcomes. Until now there has been very little in terms of details that have been revealed by the Federal Reserve, in terms of the way in which it intends to create the capital rules for that industry.
That said, the appointment of Sullivan does suggest that the Federal Reserve has intentions to make some important and relevant changes and that it will be moving ahead in publishing those details.