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FederAlAdVisorycommitteeoninsurAnceholdssecondmeetingSESSIONFOCUSESONEMERGINGMARkETSANDINTERNATIONAlREGUlATORybAlANCEThesecondmeetingoftheFederalAdvisoryCommitteeonInsuranceheldearlierthisweekfocusedonemergingmarketsandinternationalregulatorybalance.TheFACIischargedwithanalyzingemergingtrendsininsurancemarketsbothintheUnitedStatesandabroad.FederalInsuranceOfceDirectorMikeMcRaithandFACIChairmanBrianDuperreaultMarshMcLennanCompaniespresidentandCEOhaveassignedFACIcommitteememberstooneoftwosubcommitteestheAvailabilityandAffordabilityInsuranceSubcommitteeortheInternationalRegulatoryBalanceSubcommittee.Themeetingopenedwithapresentationanddiscussionofarecentreporttitledx1cInternationalizationoftheInsuranceIndustryx1dbyMcKinseyCompany.Inanattempttobetterunderstandemergingmarketsanddemographicchangeswithintheinsuranceindustrythereportsoughttoprovideadditionalinsightregardingwherethenewmarketsareemerginganddataontheirdemographics.McKinseyfoundthattherehasbeenaslightdropandstagnationofgrowthintheU.S.property-casualtyandlifeinsurancemarketssincethenancialcrisisof2008.HoweverthelargestgrowthinbothoftheseinsurancemarketsisintheAsianPacicLatinAmericaandpartsofAfrica.Thegrowthisdueanemergingmiddleclassinthesepartsoftheworld.Thesecondpartofthemeetingfocusedoncurrentinternationalregulatoryactivity.McRaithdiscussedtheU.S.interactionwiththeInternationalAssociationofInsuranceSupervisors.HenotedthattheIAISrecognizesthattraditionalp-cinsurancedoesnotpresentarisktothenationalandinternationalhealthofnancialmarkets.HoweverhealsosaidthatthereisadesireamongtheIAIStoexploreandquantifyx1cnontraditionalx1dinsurancepracticesbyinsurersanddeterminepossiblesystemicrisks.McRaithsaidthatheisworkingwithstateinsuranceregulatorstoappropriatelyidentifyamethodologytodesignatesystemicallyimportantnancialinstitutions.McRaithalsosaidthatitisimportantfortheIAISandFSOCdesignationmethodologieswhichwouldbereleasedinthecomingweekstomatchup.AccordingtoMcRaiththesemethodologieswillnotfocusonx1cstateversusfederalx1dregulationbutrathertheywillfocusonwhatisthebestapproachforU.S.consumersandinsurerstoprovidecompetitivenessandbalanceinmarketsaroundtheworld.FinallyMcRaithpresentedeachsubcommitteewithaframeworkoftheissuestheywillstudyandreporttoFIO.OfparticularinteresttoagentswillbefourissuesstudiedbytheAvailabilityandAffordabilityInsuranceSubcommitteewhichfocusontheaffordabilityandaccessibilityofinsuranceproductsintheU.S.andabroad.SpecicallyMcRaithaskedthesubcommitteetocommentonthefollowingissues1.ThepotentialimpactofinternationalinsurancedevelopmentsontheU.S.consumer.2.TheroleandvoiceoftheU.S.consumerinthedevelopmentoftheseinternationalstandards.3.HastheU.S.systemofinsuranceregulationkeptpacewithU.S.demographicchangesHeaskedthatthesubcommitteestudythelifeandp-cmarkets.4.Analyzetheimportantroleofinsuranceintermediaries.IstheinsuranceproducerimpactedbythedemographicchangesintheU.S.IfsohasregulationkeptpacewiththesechangesMcRaithsaidthesetopicswillbepartoftheagendaforthenextFACImeetingtobeheldintheearlyfall.Healsocommentedthatthelong-awaitedFIOreportwillbeoutinthex1cnearfuture.x1dJenMcPhillipsisBigx1cIx1dseniordirectoroffederalgovernmentaffairs.page5APublicationofIndependentInsuranceAgentsofWV16000WestVirginiAcustomerssettoreceiVereBAtesFromheAlthinsurersHealthinsurancecompanieswillgiverebatestotaling2.7milliontomorethan16000customersinWestVirginiathisyear.TheU.S.DepartmentofHealthandHumanServicessaysmostoftherebateswillgotopeoplewhobuytheirownhealthinsurance.Peopleinsmallgroupplanswillshare400000inrebates.Therebatesareforbillingcustomersmorethanallowedunderthenewfederalhealthcarelaw.Companiescannotspendmorethan20percentofrevenuesonadministrativecosts.U.S.SenatorJayRockefellerinsertedthatprovisionintothelaw.HetoldtheCharlestonDailyMailthroughaspokeswomanthatsomeinsurershaveraisedpricestoboostprotsinsteadofpayingformedicalcare.