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Senate Banking Committee Holds Hearing on Insurance

The hearing covered a wide range of issues, including private equity's growing ownership of property-casualty and life insurers, climate risk, credit rating agencies, diversity and inclusion, and pandemic risk insurance.
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senate banking committee holds hearing on insurance

Today, the U.S. Senate Committee on Banking, Housing, and Urban Affairs held a hearing, “Current Issues in Insurance." The hearing included testimony from two witnesses: The Honorable Kathleen A. Birrane, the Maryland insurance commissioner, who testified on behalf of the National Association of Insurance Commissioners (NAIC), and Steven Seitz, director of the Federal Insurance Office (FIO) at the U.S. Department of the Treasury. No insurance industry witnesses testified at the hearing. 

The hearing was intended to cover a wide range of issues, including private equity's growing ownership of property and casualty insurers and life insurers, climate risk, credit rating agencies, diversity and inclusion, and pandemic risk insurance. 

In his opening testimony, Seitz highlighted five priorities FIO was working on at the federal level. First, Seitz noted that climate-related financial risk is a top priority for FIO. Second, he said that FIO is monitoring the growing role of alternative asset managers, such as private equity firms, in the U.S. insurance sector. Third, Seitz mentioned that FIO is focused on cyber-related risks, which is also a top priority for Treasury and the entire federal government. 

Regarding cyber-related risk, Seitz specified that FIO has been examining insurers' cyber resilience, as well as the development of the cyber insurance market and how it may help improve policyholder resilience to cyber events and also serve as a risk-management tool. 

The fourth priority for FIO is representing the U.S. at the International Association of Insurance Supervisors (IAIS), in close coordination with the Federal Reserve, the NAIC, and the states. 

Fifth and finally, Seitz said that FIO is prioritizing diversity, equity and inclusion (DE&I). Seitz went on to say that FIO is looking at DE&I issues through the lens of the availability and affordability of insurance products, particularly for underserved communities and consumers, minorities, and low- and moderate-income persons. 

During Birrane's testimony, she noted the NAIC's and state regulators' ongoing efforts to improve regulation in the best interests of U.S. insurance consumers while fostering an innovative and competitive insurance sector. She went on to tout the state regulatory system's 151-year track record of evolving to meet the challenges posed by dynamic markets and made clear that the NAIC continues to believe that well-regulated markets make for well-protected policyholders. 

Birrane added that the NAIC is currently addressing a number of evolving dynamics, such as the impact of inflation on pricing and claims, the rise of interest rates and the fall of investment returns, risk-taking in insurers' investments, the intersection of race and insurance, climate risk and resilience, cyber risk, and the impact of technology on consumers, companies and supervisors, among a host of other issues. 

In news important to Big “I" members, Sen. Jon Tester (D-Montana), a long-time supporter of the National Association of Registered Agents & Brokers (NARAB), expressed frustration at the lack of action by the administration in appointing a NARAB board. He went on to ask Seitz for an update on the board appointments. Seitz noted the importance of NARAB and said FIO had been working on appointing a board for the last several years but gave no timeline for having a board in place. Sen. Tester ended the exchange by asking FIO to be more aggressive in appointing the NARAB board. 

Wyatt Stewart is Big “I" assistant vice president of federal government affairs.

Monday, September 19, 2022
On the Hill