Mandated by the Dodd-Frank Act, the Federal Insurance Office (FIO) is required to release a report by January 31, 2012 to the U.S. Congress on the state insurance regulatory regime and recommend whether federal intrusion into insurance regulation is warranted.

Indiana State University’s Networks Financial Institute (NFI) released a report earlier this month to the FIO which recommends that the FIO “focus squarely on the insurance industry and not become unnecessarily burdened” with the financial services industry as a whole. 

A handful of proposals from the NFI report may be included in the FIO report. 

Detailed recommendations on all six of the mandatory areas that the FIO’s report must cover and considerations for another seven optional items were provided in NFI’s report.  Federal focus is recommended on particular insurance lines, including life insurance and some other sectors including monoline bond and annuities carriers. 

While the NFI report does not recommend unrestrained federal regulation or that the National Association of Insurance Commissioners (NAIC) be removed from the regulatory equation in favor of the federal government, it does recommend that the FIO director become the expert voice on insurance at the federal level.