Insurance Regulation 2013: What the Future Holds...

A couple of industry observers, Arthur D. Postal and Elizabeth D. Festa, speculate on the future of state and federal insurance regulation in 2013.
Assuming the Mayans just got tired of calendaring out the centuries and the world doesn't end on December 21, 2012, Arthur D. Postal of has consulted the augurs and put together his federal regulatory forecast for the life and health insurance industry in Washington Regulation: 6 Things to Look for in 2013.

Postal's article is worth the read, but a few highlights:
  • Although speculation previously suggested that the report on insurance modernization by the Federal Insurance Office (FIO) would finally arrive, a year after its original deadline, in January of 2013. Postal says that now appears unlikely "with signs emerging that the administration will delay the release of the report until after a new Treasury secretary is confirmed sometime early next year."
  • One reason for the apparent delay is that the administration doesn’t want Republicans in Congress to use the report to embarrass the administration through the confirmation process if it contains proposals calling for greater federal regulation, a politically sensitive issue.
  • Although consolidated regulation of insurance companies that operate savings and loans is mandated under the Dodd-Frank Act, "members of Congress have made clear through recent hearings that they won't support strong oversight of these institutions." As the designated regulator, however, the Federal Reserve Board may have its own ideas.
  • American International Group (AIG) could be designated a "systemically important" non-bank financial institutional by the Federal Stability Oversight Council before the end of the year, and other insurers could face similar designation next year.
  • Taxes are going up, including estate taxes. But Postal suggests that "with the certainty likely to be generated by knowledge that the government is coming to terms with the need for increased revenue and lesser expenditures, the stock market is likely to rise...".[1]

Also tempting the Mayan fates is Elizabeth D. Festa, who crystal-balls 2013 with respect to state regulation in State Regulation: 4 Things to Expect in 2013 at

Again, Festa's article is definitely worth the read, but consider a few of her points:
  • Like Postal, Festa also predicts the emergence of the long overdue FIO report on insurance modernization.
  • While there is plenty to speculate about, only when it is finally issued by the Federal Insurance Office will we have an idea of the FIO’s intent toward a more modern regulatory regime, including whether it intends to act purely as a fact-finding body, or if it will lay the groundwork for more substantive action.
  • New NAIC President, Louisiana Insurance Commissioner James J. "Jim" Donelon will have his hands full after the retirement of current NAIC CEO Terri Vaughn at a time when the NAIC has "an ambitious agenda and no small number of critics."
  • To the extent the various states have elected to participate, state regulators will be busy setting up and working with the health care exchanges under the Patient Protection and Affordable Care Act. Regulators may also be occupied with trying to push the principles-based reserving provisions of the recently adopted NAIC Valuation Manual through their state legislatures. [2]

1Washington Regulation: 6 Things to Look for in 2013, Arthur D. Postal,, December 19, 2012.
2State Regulation: 4 Things to Expect in 2013, Elizabeth D. Festa, December 19, 2012.

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