Representation of the insurance industry on the Financial Stability Oversight Council is inadequate, Missouri Insurance Director John Huff, a non-voting member on the council, told Congress April 14.
The council, established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, is charged with monitoring systemic risk in the financial system and designating financial institutions for heightened supervision. The panel of 15 members is supposed to include three representatives from the insurance industry, but two of the posts have yet to be filled, Huff said, even though the council has been working "at a furious pace."
"In the time since my appointment to the FSOC, I personally have attended four full FSOC meetings and, along with my very limited staff resources, have participated in innumerable meetings and conference calls of FSOC's nine committees," Huff told the House Committee on Financial Services Subcommittee on Oversight and Investigations. He testified on behalf of the National Association of Insurance Commissioners. "Unfortunately, my seat at the table is the only one having to do with insurance that has been filled."
Illinois Insurance Director Michael McRaith recently accepted an appointment but will not begin his term on the council until June, and President Obama has yet to fill the third seat.
Huff said he has also been restricted from consulting with fellow insurance regulators on matters before the council. The U.S. Treasury Department says he represents Missouri, not the insurance regulatory system.
"Such a position contradicts Congressional intent and the deference accorded to state insurance regulators in the explicit language of the statute itself," Huff said. "But most importantly, it contradicts logic and reason."
Huff was asked to testify before the subcommittee along with other financial regulators on the council.
"The council's aggressive timetable and ambitious scope of work can be better achieved through full engagement of state regulators," Susan E. Voss, National Association of Insurance Commissioners president and Iowa insurance commissioner, said in a statement. "Limiting Director Huff's ability to collaborate and consult with fellow state regulators would be a disservice to the council and its important role."