This testimony before the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity, presented by Robert Hartwig, president and economist of the Insurance Information Institute, focuses on the role of the insurance industry and the benefits that insurance products and services provide to consumers, job creators and the economy. It also addresses concerns associated with certain Dodd-Frank provisions affecting insurers that could raise compliance costs or adversely affect the structure, capacity or ability of the insurance industry to absorb risk. It notes that insurance is a very large, dynamic and essential component of the American economy and is an important segment of the financial services industry. Property/casualty and life/annuity insurers operating in the United States today generate more than a $1 trillion in annual premium income, hold more than $4.5 trillion in assets and employ some 2.3 million people. It is an industry that is financially strong, stable, sound and secure. Concerning Dodd-Frank, the testimony acknowledges that the Act explicitly recognized the unique nature of insurance and that the business of insurance was not the cause of the financial crisis that began in 2008. Consequently, insurance was not the focus of the Act and insurers were carved out or exempted from much of the regulation to which banks and other financial institutions were subjected. However, a number of provisions of Dodd-Frank, when fully implemented or because of potential misinterpretations of the Act’s intent, could reduce the ability of insurers to accumulate capital or mitigate risk and therefore negatively impact the economy overall. These issues remain of concern to many insurers today. PowerPoint slides accompany the testimony.
Robert P. Hartwig, Ph.D., CPCU, President & Economist, testified before the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity on July 24, 2012.
The hearing focused on "The Impact of Dodd-Frank’s Insurance Regulations on Consumers, Job Creators and the Economy". You can download the testimony below: