YesterdayÃ¢â‚¬â„¢s U.S. House of RepresentativesÃ¢â‚¬â„¢ hearing on Congressional Ã¢â‚¬ËœOversight of the Financial Stability Oversight Council (FSOC)Ã¢â‚¬â„¢ has made for a number of headlines.
A new Insurance Information Institute (I.I.I.) white paper provides insights on the property/casualty insurance industry and systemic risk.
In the paper co-authors Dr. Robert Hartwig, president of the I.I.I. and an economist, and Dr. Steven Weisbart, senior vice president and chief economist for the I.I.I. remind us that not one property/casualty insurer failed as a result of the financial crisis or the ensuing Ã¢â‚¬Å“Great RecessionÃ¢â‚¬ .
As financial regulators consider criteria for determining which financial institutions might be systemically risky, the authors note that P/C insurance is fundamentally different from banking, and poses no systemic risk to the financial system.
Inappropriate inclusion of P/C insurers could cause harm not only to insurers, but to consumers and the efficacy of financial institution regulation in general, the paper concludes.
Check out theÃ‚ I.I.I.Ã‚ issues updateÃ‚ on regulation modernization.