McRaith Named Director of Federal Insurance Office

Treasury Secretary Timothy Geithner on March 17 named Illinois Insurance Director Michael McRaith as the first director of the Federal Insurance Office (FIO), a non-regulatory federal source of insurance expertise created by the Dodd-Frank Act.

In addition to heading the Illinois Insurance Department, McRaith is also the current NAIC Secretary-Treasurer. Director McRaith has announced that he will assume his post at the FIO at some time in May.

The FIO was created with the passage of the Dodd-Frank Act when it became apparent that there was no central source of insurance expertise or representation at the federal level. The Office will not have regulatory authority, nor can it pre-empt state regulations (unless dealing in international matters, at which point, the FIO will share jurisdiction with the United States Trade Representative). The FIO will, however monitor all activities related to the business of insurance (with the exception of health insurance) and will report back to the Treasury Secretary on the financial stability of insurers, and whether any given insurer poses a systemic risk to the stability of the overall financial system.

As FIO director, McRaith will serve as a non-voting member on the Financial Stability Oversight Council (FSOC), a governing board which assesses large financial institutions and determines their level of systemic risk to the economy. McRaith joins Missouri Insurance Commissioner John Huff on the Council. The Administration has yet to fill the seat of the one voting member of FSOC with insurance expertise. Regulators and legislators have been calling on Geithner to announce this crucial appointment.