President, Chairman and CEO Bob Restrepo provided an overview of the current U.S. insurance regulatory system before the U.S. House Subcommittee on Housing and Insurance yesterday in Washington, D.C. Restrepo took part in the hearing on “The Federal Insurance Office’s (FIO) Report on Modernizing Insurance Regulation” on behalf of the Property Casualty Insurers Association of American (PCI), of which he was recently elected chair of the Board of Governors.
“The U.S. has the largest and most diverse insurance market in the world, with a 150-year track record of comprehensive state regulation protecting consumers,” according to Restrepo. “The insurance sector has been stable throughout the last several financial crises and despite a confluence in the last decade of record storms, market contractions and regulatory changes, has had no major recent defaults, has achieved record levels of capitalization and our residual markets for consumers and businesses are at or near historic lows as a marketplace, suggesting that overall private sector insurance availability is better than ever for consumers.”
Restrepo presented a case for improving state regulation of insurance entities. The FIO report recommends, in part, a “hybrid” federal-state approach to insurance regulation, which Restrepo addressed as follows:
“The FIO report does a good job of itemizing the numerous current controversies in insurance regulation that the states are working on. But we would fundamentally disagree with FIO’s conclusion that ‘the need for uniformity and the realities of globally active, diversified financial firms compel the conclusion that federal involvement of some kind in insurance regulation is necessary or that a hybrid federal-state approach would be preferable.”
View and read Restrepo’s complete testimony; please view here for PCI news release about the event.