American Council of Life Insurers (ACLI) President and CEO Dirk Kempthorne issued the following statement on the U.S. Treasury Department’s report on Financial Stability Oversight Council designations:  

Washington, D.C., (November 17, 2017) – “The American Council of Life Insurers (ACLI) commends Treasury Secretary Steven Mnuchin and the Treasury Department for the report on designations by the Financial Stability Oversight Council (FSOC).

“While ACLI is reviewing the entirety of the report, we are strongly encouraged by the emphasis on improved engagement and transparency in the designation process. No life insurer should be designated as systemically important. The report rightfully recognized that”

• Designating insurers as systemic is not an effective or efficient approach for addressing potential risk to financial stability;
• FSOC should leverage the insights and expertise of state insurance regulators, including to address potential systemic risks;
• Designation analyses should be reformed to provide more rigor, transparency and consistency;
• FSOC should articulate more clearly to a designated nonbank financial company the specific risks that led to the designation.

“The Treasury Department also recommended that FSOC implement a three-step process to identify systemic risks throughout the financial services industry, including working in close coordination with primary regulators, and noted that designating individual insurers for strict federal oversight is not the best approach for mitigating systemic risks.

“The life insurance industry helps Americans prepare for their financial futures, while easing pressure on government programs. We look forward to working with Secretary Mnuchin and other policymakers on initiatives that reinforce our industry’s role as a private-sector safety net.“

The American Council of Life Insurers (ACLI) is a Washington, D.C.-based trade association with approximately 290 member companies operating in the United States and abroad.  ACLI advocates in state, federal, and international forums for public policy that supports the industry marketplace and the 75 million American families that rely on life insurers’ products for financial and retirement security. ACLI members offer life insurance, annuities, retirement plans, long-term care and disability income insurance, and reinsurance, representing 95 percent of industry assets in the United States. Learn more at www.acli.com.