Earlier this month, the Federal Advisory Committee on Insurance (FACI) met to consider recommendations put forward by its subcommittee on international work, among other topics. Under a new subcommittee structure, FACI hopes to make more recommendations to assist the Federal Insurance Office (FIO) in carrying out its statutory authority.
The new subcommittees fall under three main topics: availability of insurance products; FIO's international work; and addressing the protection gap through public-private partnerships and other mechanisms. Big “I” member Quincy Branch is a member of the FACI Subcommittee on the Availability of Insurance Products.
The international recommendations attempt to build on the outcome of a recent International Association of Insurance Supervisors meeting in Abu Dhabi, which allows the U.S. to demonstrate “comparability” with the International Capital Standard (ICS). FACI embraced the recommendations to use a 5-year monitoring period as a chance to allow the National Association of Insurance Commissioners (NAIC) to finalize its Group Capital Calculation and “to promote education and outreach on aggregation across interested regulators globally.” U.S. insurance companies and regulators had objected to the ICS because it does not comport with the U.S. regulatory system or anticipated capital standards.
FACI also recommended steps for FIO to take to reduce the "protection gap" for natural disasters. The five recommendations included staging demonstrations of how mitigation investments reduce risks of losses in catastrophes, coordinating investments in mitigation, requiring mitigation policies and investments be included in all levels of government, providing financial incentives to encourage mitigation efforts, and exploring the effectiveness of innovative industry solutions.
Heather Eilers-Bowser is Big “I” counsel, federal government affairs.