Data is Crucial to Insurance Regulation, FSOC Members McRaith, Huff Say

More from the 2012 P&C Joint Industry Forum: Catastrophes Put Focus on Underwriting Discipline

Insurance regulators don't make decisions in a vacuum. Rather, they depend heavily on qualitative insights gleaned from robust data, officials said at yesterday's 2012 Property/Casualty Insurance Joint Industry Forum, held at the Waldorf-Astoria hotel in New York.

"Data is king," according to John Huff, director of the Missouri Department of Insurance and a non-voting member of the Financial Stability Oversight Council (FSOC).

Insurance regulators in the U.S. are far ahead of their European counterparts in terms of their data collection skills, Huff added, noting that regulators are working to use that data to more effectively oversee insurers.

"I can call Kansas City and get the data I need in half an hour," he said. "Using that data more constructively is where we should be going. We can't be totally reliant on others to do our work in evaluating these companies."

Federal Insurance Office (FIO) director Michael McRaith added in a speech later in the program that "much of our effort" to guide the insurance industry "will involve data analysis." But federal-level observation doesn't mean there's going to be an avalanche of federal data requirements, he added.

"The law is clear that FIO must first seek any information it needs from a public source or from another regulator, including the states," McRaith explained. "Only if the information is unavailable from either of those sources does FIO then directly ask an insurer for information."

The director of the Federal Insurance Office is also a non-voting member of the FSOC. Representing insurance interests with voting power is Roy Woodall, the former Senior Insurance Policy Analyst for Treasury. He was nominated by President Obama in June and confirmedin September.

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio