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Federal Insurance Office (FIO)

Last Updated 1/31/17

The Federal Insurance Office (FIO) was established by Title V of the federal Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank). The FIO is housed within the U.S. Department of the Treasury and is headed by a director who is appointed by the secretary of the Treasury. While the FIO serves an important role by providing necessary expertise and advice regarding insurance matters to the Treasury Department and other federal agencies, it is not a regulatory agency and its authorities do not displace the time-tested robust state insurance regulatory regime.

The NAIC coordinates closely with the FIO to serve as an information resource for the federal government and to engage in international discussions in conjunction with U.S. insurance regulators. The NAIC hopes to work with the incoming administration to advocate for changes to the FIO in 2017.

Scope and Functions
The FIO’s authorities extend to all lines of insurance other than health insurance, long-term care insurance (except that which is included with life or annuity insurance components) and crop insurance, which is governed by the Federal Crop Insurance Act. The FIO does not have supervisory or regulatory authority over the business of insurance.

The FIO is charged with monitoring all aspects of the insurance sector, including identifying activities within the sector that could potentially contribute to a systemic crisis to the broader financial system, the extent to which under-served communities have access to affordable insurance products, and the sector's regulation. The director of the FIO serves as a non-voting member of the Financial Stability Oversight Council (FSOC). The FIO also plays a role in the resolution of certain troubled insurance companies. In addition, the FIO is tasked with assisting the secretary of the Treasury in negotiating covered agreements.

The FIO advises the Secretary of the Treasury on major domestic and prudential international insurance matters. The FIO has authority to represent the U.S. federal government internationally at meetings of the International Association of Insurance Supervisors (IAIS) and other similar organizations. However, state insurance regulators, either directly or through their NAIC representatives, present the views of the insurance regulatory community internationally.

Powers
In order to carry out these functions, the FIO is authorized to receive and collect data and information on the insurance industry and can enter into information sharing agreements with state regulators. The FIO can also require an insurer or its affiliate to submit data to the office; however, the FIO must first determine whether any public or regulatory sources are available before requiring such information directly from an insurer. The law provides an exemption for small insurers that meet a minimum size threshold not yet defined by the FIO.

Reports
The FIO is responsible for issuing several one-time reports as well as annual reports to the U.S. Congress. In December 2013, the FIO released a mandated study titled "How to Modernize and Improve the System of Insurance Regulation in the United States." The report acknowledges many of the strengths and accomplishments of state-based insurance regulation. The FIO recently released its third Annual Report on the insurance industry. A listing of available FIO reports can be found on the U.S. Department of the Treasury/FIO Webpage.