Academy Pledges Assistance with Insurance Modernization
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WASHINGTON – The American Academy of Actuaries is offering Congress assistance as it oversees modernization of insurance regulation in the United States.
In written testimony submitted yesterday to the U.S. House Committee on Financial Services’ Subcommittee on Housing and Insurance on the Federal Insurance Office’s (FIO) report on modernizing insurance regulation, Academy Financial Regulatory Reform Task Force Chairperson Jeffrey Schlinsog, MAAA, FSA, said that effective modernization should rely “on sound risk management practices operating in concert with effective functional regulation and should emphasize the preservation of insurers’ financial strength needed to fund insurance guarantees through reserve and capital requirements.” The task force submitted the testimony ahead of the subcommittee’s Feb. 4 hearing on the FIO report.
The testimony noted that actuaries’ expertise and experience with insurance risk, solvency, and reporting and capital requirements could help policymakers and regulators ensure that modernization:
- Follows basic principles for designing effective and coordinated regulatory systems;
- Takes into account the specific underlying risks and business model of insurance affiliates of non-bank systematically important financial institutions; and
- Addresses recommendations in the FIO report regarding state implementation of principle-based reserving, solvency oversight and capital adequacy regimes, and natural catastrophe loss mitigation.
The Academy “would welcome the opportunity to provide you with the objective, non-partisan perspective of the actuarial profession in navigating the complexities of current and future insurance regulation and oversight,” Schlinsog told the subcommittee.
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The American Academy of Actuaries is an 18,000-member professional association whose mission is to serve the public and the U.S. actuarial profession. The Academy assists public policymakers on all levels by providing leadership, objective expertise, and actuarial advice on risk and financial security issues. The Academy also sets qualification, practice, and professionalism standards for actuaries in the United States.
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