Our Positions | Financial Stability - Macroprudential Oversight

Since the financial crisis regulators have been concerned about overall financial stability and ways to oversee the aggregate risks and impacts the insurance industry both suffers from and could create or contribute to for the greater economies of the U.S. and the world. The NAIC and the IAIS both see an important regulatory role for insurance supervisors in overseeing these macroprudential concerns. Had there been no insurance company playing a significant role in the 2008 crisis insurers may be not addressing these concerns, but since one insurer was engaged in activity that had a potential impact on overall financial stability the whole industry has been included in the regulatory excess.

The focus on financial stability and macroprudential oversight is best illustrated in the following supervisory trends:

  • higher capital requirements to avoid future insolvencies altogether;

  • emphasis on group supervision instead of legal entity to ensure the overall financial impact is considered;

  • increased data demands to provide regulators with better information about macro-economic trends and more aggregate information on the activities of groups; and many other conservative approaches to regulatory oversight.

NAMIC Position

NAMIC supports financial stability in the U.S. and globally. A stable economy helps NAMIC members in several respects – more consistent and stronger investment returns; more predictable claim costs; stable premium growth; and overall predictable business patterns. However, the methods supervisors have decided to use to ensure such financial stability are often suspect, costly and, most important, unsuccessful in accomplishing the goal they seek to achieve.

Financial stability is not an issue that insurance supervisors alone can impact on a piece meal basis through insurance regulation. It is a government and global issue that requires participation across financial sectors and across international boundaries. The attempts to require extreme levels of insurance capital or overly conservative insurance enterprise risk management will not just result in costs to the industry, but could have the opposite effect of damaging the insurance industry. Too often supervisors forget that the traditional insurance industry did not fail during the crisis. They continued to pay their claims and keep their promises to their policyholders. In fact, the traditional insurance industry has been identified as a stabilizing influence.

Key Senators Introduce Bill to Elevate State Insurance Commissioner on FSOC

July 2, 2018 Sens. Tim Scott, R-S.C., and Doug Jones, D-Ala., members of the Senate Banking Committee, introduced a bill June 28 to elevate the role of a state insurance commissioner sitting on the Financial Stability Oversight Council. The bipartisan legislation... Read more

HFS Committee to Consider Insurance Legislation at May 9 Meeting

April 30, 2018 The House Financial Services Committee is planning to hold a markup on May 9 to consider several pieces of legislation, which is likely to include pieces of legislation dealing with the insurance industry... Read more

Ross, Heck Introduce Bill to Elevate State Insurance Commissioner on FSOC

April 30, 2018 Reps. Dennis Ross, R-Fla., vice chairman of the House Financial Services Subcommittee on Housing and Insurance and Denny Heck, D-Wash., introduced a bill April 27 to elevate the role of a state... Read more

Senate Confirms Workman for FSOC Post

March 26, 2018 The Senate confirmed Thomas Workman on March 21 as the independent voting member with insurance expertise on the Financial Stability Oversight Council. Prior to his nomination, Workman served as president and CEO of the New York-based Life Insurance ... Read more

Financial Stability Task Force and the Macroprudential Surveillance Initiative

December 12, 2017 The Financial Stability (EX) Task Force announced at the summer meeting its intentions to determine if there are gaps in macroprudential data related to large insurance groups. The task force indicated it was looking for... Read more


Jonathan Rodgers
Director of Financial and Tax Policy