Title V of the Dodd-Frank Wall Street Reform and Consumer Protection Act establishes the Federal Insurance Office (FIO), to be run by a director appointed by the Secretary of the U.S. Treasury, that is intended to study and share information about the insurance industry rather than regulate the industry.

Strictly speaking, the FIO has no regulatory powers. But it does have the authority to request information and to report to the Secretary of the U.S. Treasury with recommendations to address gaps in insurance regulation that could harm consumers or contribute to systemic risk in the U.S. financial system.

Among the most important powers accorded to the Federal Insurance Office within Title V is the authority to gather information directly from insurance companies. This has raised concerns that insurers will face additional compliance burdens resulting from FIO "data calls."

Title V applies to all lines of insurance except health insurance, long-term care (except when bundled with life insurance) and crop insurance, which are exempt from the legislation. Title V requires the director of the FIO to conduct a study on the insurance regulatory system, and to submit a report to Congress on how to modernize the system no later than 18 months from enactment (i.e., January 2012).

At press time, a director of the FIO had not yet been appointed. Like much of Dodd-Frank, the ultimate impact of Title V is hard to assess. Insurance industry observers worry that a zealous FIO director might seek to maximize the office's power. Those concerns have been muted by Republican congressional gains in the 2010 midterm elections. However, until a director is appointed, many aspects of Title V and the FIO remain undefined. The greatest fear on the part of some insurance industry players is that the FIO will precipitate some kind of dual regulatory system, while others favor federal regulation of some part of the insurance industry.