INSURANCE INFORMATION INSTITUTE
New York Press Office: (212) 346-5500; media@iii.org
NEW YORK, May 12, 2011 — Reporters covering the U.S. Senate hearing today on Oversight of Dodd-Frank Implementation: Monitoring Systemic Risk and Promoting Financial Stability can review an Insurance Information Institute (I.I.I.) white paper on the property/casualty insurance industry and systemic risk.
Co-authored by 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., the paper, Property/Casualty Insurance and Systemic Risk, offers a six-page overview of how the risk management practices at U.S. auto, home and business insurers are superior to those that were in place at most banking institutions throughout the 2008-2009 economic downturn. As a result, the P/C insurance industry as a whole poses no systemic risk to the world’s financial system.
“While no one disputes the need for better oversight of lightly or unregulated firms that can shake the foundations of our financial system, the Financial Stability Oversight Council (FSOC) must employ sound economic principles in the identification of systemically important firms,” Dr. Hartwig stated. “At least when it comes to the property/casualty insurance industry, the companies that sell auto, home and business insurance, the FSOC may mistakenly believe that size and size alone is a sufficient criterion for identifying systemic importance. Yet irrespective of size, it is difficult to see how companies that sell protection against losses arising from such things as auto accidents, kitchen fires and lawsuits from slip-and-fall accidents could ever be construed as systemically risky.”
The U.S. Senate’s Committee on Banking, Housing & Urban Affairs is convening
this morning in Washington, D.C. Created under the Dodd-Frank law, the Financial Stability Oversight Council is charged with identifying threats to the financial stability of the United States, promoting market discipline, and responding to emerging risks to the stability of the U.S. financial system.
Reporters who want to interview either Dr. Hartwig or Dr. Weisbart can contact Michael Barry, vice president, Media Relations, I.I.I. at 212-346-5542 or
michaelb@iii.org.
THE I.I.I. IS A NONPROFIT, COMMUNICATIONS ORGANIZATION SUPPORTED BY THE INSURANCE INDUSTRY.
Insurance Information Institute, 110 William Street, New York, NY 10038, (212) 346-5500