U.S. first-quarter GDP growth revised up to 1.4 percent
WASHINGTON, June 29 The U.S. economy slowed less sharply in the first quarter than initially estimated due to unexpectedly higher consumer spending and a bigger jump in exports.
With no sign of a replacement in the works, the U.S. insurance industry is pushing to prevent the departure of a key figure on the federal body that determines how large insurance companies are regulated.
Roy Woodall, the sole independent voting member of the Financial Stability Oversight Council (FSOC) with insurance expertise, will lose his seat in late September, as his six-year term set out under the Dodd-Frank financial regulation reform law expires.
His presence on the council is important to the insurance industry, because FSOC has the power to decide whether large financial companies are "systemically important financial institutions," or SIFIs, a tag that carries higher capital requirements and Federal Reserve oversight.
As there is no federal insurance regulator, Woodall is effectively the most important figure in U.S. regulation of large insurers.
He will be forced to step down in five months, leaving a critical vacancy on the FSOC, which is based out of the U.S. Treasury Department, unless Congress changes the Dodd-Frank law and permits him to be held over temporarily, or U.S. President Donald Trump acts swiftly to nominate a replacement.
"Treasury doesn’t have that much experience in insurance, so it makes the insurance expert particularly important," said Dave Snyder, vice president of international policy and policy development for the Property Casualty Insurers Association of America.
A U.S. Treasury spokesperson declined comment.
Woodall, 80, told Reuters that he would not want to serve another full six-year term but would be willing to stay on until a replacement can be confirmed.
Several large insurers fought their SIFI designations, arguing that they do not pose the same kind of risks as big banks.
Prudential Financial Inc (PRU.N) and American International Group Inc (AIG.N) still carry the designation, but Prudential is widely expected to seek to have it rescinded.
Industry executives say that if Woodall leaves without a replacement lined up, it could hurt their chances of success.
FSOC's process to determine whether to apply the designation is "imprecise," said Ann Kappler, Prudential's deputy general counsel and head of external affairs, on Wednesday during an event about insurance regulation organized by the Bipartisan Policy Center, a think tank.
Many FSOC staffers responsible for decisions did not fully understand how the company operates, Kappler said. "Despite the amount of work done by FSOC staff, it was rife with problems," Kappler said.
Two-thirds of FSOC's sitting members must support rescinding a designation for it to happen, and regulatory matters affecting insurance companies are likely to come up during FSOC meetings.
A former insurance commissioner of Kentucky, Woodall has more than 50 years of experience in insurance regulation, law and policymaking. Former President Barack Obama appointed him to the FSOC in 2011.
He voted against designating Prudential and MetLife Inc (MET.N) as SIFIs but was outnumbered by his other FSOC colleagues.
He favored designating AIG, whose near-failure during the 2008 crisis was a major threat to the financial system, as well as GE Capital, which has since shrunk and simplified.
"Roy Woodall is nobody's puppet," said Bridget Hagan, a partner at the lobbying and consulting firm Cypress Group, who also leads a coalition of insurers that are subject to Federal Reserve supervision. "But he has deep experience ... It's important that he stay in his role until a new official is confirmed."
GE Capital shed its designation after breaking itself up, and MetLife successfully sued the government to shake its designation. An appeal is working its way through the courts.
Although Woodall’s departure is five months away, insurers are worried that the White House will not nominate a replacement in time, or that Congress will not change the law to permit Woodall to be held over on a temporary basis.
Trump has been slow to appoint financial regulators, including those that wield more power, such as the Federal Reserve's vice chair of supervision.
A White House spokeswoman said the president is aware of the deadline and that it will be addressed in due time.
Woodall's situation is unique on the council, whose other members are allowed to continue serving in their roles on expired terms, or be temporarily replaced with an acting member if there is a vacancy. The FSOC is composed of heads of federal financial regulators and led by U.S. Treasury Secretary Steven Mnuchin.
Industry lobbyists are starting to approach lawmakers to find out whether they might be willing to tuck language into unrelated legislation, such as a spending bill, that would allow Woodall to stay in place, a person familiar with the matter said.
A financial regulatory proposal by House Financial Services Chairman Jeb Hensarling would merge Woodall’s role with a separate job inside the U.S. Treasury's Federal Insurance Office and allow for the sitting expert to be held over after a term expires. But the bill is not expected to go far because Senate Democrats oppose it.
(Reporting by Sarah N. Lynch in Washington and Suzanne Barlyn in New York; Editing by Lauren Tara LaCapra and Bill Rigby)
WASHINGTON, June 29 The number of Americans filing for unemployment benefits edged up last week, but the underlying trend remained consistent with a tight labor market.
BENGALURU/LONDON Global stock market indexes are set for more gains by the end of this year, with notable optimism in the latest Reuters poll driven by an economic revival in Europe as well as bright prospects for much of Asia.