It is looking for a larger role in being able to regulate insurers, particularly in specific sectors.
The United States Treasury has now made a call to be able to receive a broader role in overseeing the US insurance industry on a federal level, especially when it comes to areas such as mortgage coverage, the use of personal data for calculating premiums, the collection of the information in the first place, and the employment of secretive “captives” entities by insurers in order to try to keep risks off the books.
Though the Treasury is seeking greater power, it still leaves a considerable amount of oversight under state control.
The Treasury released a report on the strengthening of the regulation of the US insurance industry. While it would take more of this responsibility onto itself, it would still leave a considerable amount where it has been for the last century, in the hands of the states, themselves.The report was produced in response to an order by the Dodd-Frank financial overhaul law. It stated that the time had come to cease the debating regarding which government level should be responsible for oversight and that a hybrid model should be created in order to assign duties to both federal and state.
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This report has been tentatively awaited by the US insurance industry and the states themselves.
The research and writing effort was led by Michael T. McRaith, the director of the Federal Insurance Office at the Treasury. He is also a former Illinois state regulator. The states have been wary as they awaited the report, as they already collect a considerable amount of tax from insurers and are not seeking to lose this opportunity through the loss of jurisdiction over those companies. The insurers have, so far, expressed mixed opinions regarding the topic of regulation from the state versus that from the federal government.
The report indicated that there has already been a foundation for a hybrid model for a number of years. It has been laid quite gradually over the last few years as the federal government has become more active in various areas of the US insurance industry, such as in crop failure coverages, as well as programs for terrorism and flooding coverage.