UNITED STATES DEPARTMENT OF THE TREASURY

FEDERAL ADVISORY COMMITTEE ON INSURANCE

SUMMARY OF PUBLIC MEETING

November 4, 2015

The Federal Advisory Committee on Insurance was convened at 1:00 P.M. on November 4, 2015 

in the Cash Room at the U.S. Department of the Treasury, 1500 Pennsylvania Avenue, NW, 

Washington, D.C., with Daniel Glaser, Chair, presiding.

In accordance with the provision of the Federal Advisory Committee Act, the meeting was open 

to the public.

Committee Members Present:

DANIEL GLASER, President and Chief Executive Officer, Marsh & McLennan

Companies, Inc., Chair

DAVID (BIRNY) BIRNBAUM, Executive Director, Center for Economic Justice

AMY BACH, Executive Director, United Policyholders (by phone)

LAURA BISHOP, Executive Vice President and Chief Financial Officer, USAA

KURT BOCK, Chief Executive Officer, Country Financial

ELIZABETH BROWN, Professor, Georgia State University (by phone)

BRENDA CUDE, Professor, University of Georgia

JOHN FRANCHINI, Superintendent, New Mexico Office of Superintendent of Insurance

LORETTA FULLER, Chief Executive Officer and Chief Financial Officer, Insurance

Solutions Associates

MARK GRIER, Executive Vice President, The Prudential Insurance Company of America, Inc.

GEORGE KEISER, Representative, North Dakota House of Representatives

JAMES KELLEHER, Executive Vice President and Chief Legal Officer, Liberty Mutual

Insurance

THEODORE MATHAS, Chairman, President, and Chief Executive Officer, New York Life

Insurance Company (represented by proxy Joel Steinberg)

SEAN MCGOVERN, Chief Risk Officer & General Counsel, Lloyd's of London 

JULIE MCPEAK, Commissioner, Tennessee Department of Commerce and Insurance 

TERESA MILLER, Commissioner, Pennsylvania Insurance Department

Insurance

AL REDMER, Commissioner, Maryland Insurance Administration

MICHAEL RILEY, Commissioner, West Virginia Offices of the Insurance Commissioner

MARGUERITE SALAZAR, Commissioner, Colorado Division of Insurance

Also Present: 

ANDY NEAL, Actuary, National Flood Insurance Program, Federal Emergency Management 

Agency

MICHAEL NEWMAN, Senior Policy Analyst, Federal Insurance Office, U.S. Department of

the Treasury

MICHAEL MCRAITH, Director, Federal Insurance Office, U.S. Department of the Treasury

EMILE MONETTE, Director of Government-wide Cyber Security, Resilience, and Risk at the 

U.S. General Services Administration
Welcome Introduction and New Members

Director McRaith welcomed the members of the Federal Advisory Committee on Insurance 

(FACI) and convened the meeting.

Update from the Affordability and Accessibility Subcommittee

Chairman Glaser then introduced Birny Birnbaum, Chair of the Affordability and Accessibility 

Subcommittee. Mr. Birnbaum provided a summary of a Subcommittee call which discussed the 

affordability of personal auto insurance, including FIO’s proposal for an affordability index for 

auto insurance, and data opportunities for FIO. The committee specifically discussed the need 

for a more granular and geographic data-driven analysis to yield sufficient insight and 

understanding of the affordability of auto insurance. Director McRaith, Mr. Bock, 

Representative Keiser, Mr. Kelleher, and Ms. Bach asked questions of Mr. Birnbaum.

Update from the Prudential Issues Subcommittee 

Chairman Glaser then introduced Ted Mathas, Chair of the Domestic Prudential Issues 

Subcommittee. Mr. Mathas provided a summary of a Subcommittee call that discussed the 

intersection between federal and state involvement in the retirement security space. During the 

call, the Subcommittee discussed three Treasury initiatives to help address some concerns 

regarding retirement security: the use of annuities in 401K plans; modification of the rules for 

required minimum distributions that allow for the use of qualified longevity insurance contracts; 

and the myRA program. Commissioner Redmer, Ms. Cude, Mr. Birnbaum, and Ms. Fuller 

engaged in discussion with Mr. Mathas.

Discussion of Affordability in the National Flood Insurance Program

Chairman Glaser then introduced Andy Neal from the National Flood Insurance Program (NFIP)

at the Federal Emergency Management Agency (FEMA) for a presentation regarding ongoing

work related to affordability of insurance purchased through the NFIP. Mr. Neal discussed the 

progression of implementation of legislation regarding flood insurance and how policyholders

are affected by it. Representative Keiser, Mr. McGovern, Mr. Birnbaum, Ms. Bach, and 

Commissioner Salazar asked questions of Mr. Neal. 

Discussion of Modernizing Insurance Regulation

Chairman Glaser then introduced John Biggs of New York University to discuss some of the 

issues raised in the book Modernizing Insurance Regulation, including the systemic role of 

insurance companies during the 2008 recession. Chairman Glaser, Mr. Bock, and Commissioner 

McPeak then asked questions of Mr. Biggs. 

The Committee then recessed for a short break. 
Discussion of Important Developments at the International Association of Insurance 

Supervisors

Following a twelve minute break, Chairman Glaser introduced Director McRaith to present on 

the current work of the IAIS, including the recent announcement regarding Higher Loss 

Absorbency and the upcoming work on the G-SII assessment methodology. Commissioner 

McPeak then reported on the progress of the IAIS initiatives from the perspectives of state 

insurance regulators. Mr. Kelleher then asked a question of Director McRaith. 

Discussion of National and Global Developments on Cybersecurity and the Insurance 

Sector

Chairman Glaser then introduced Raj Shah, Senior Director for Cybersecurity Strategy at Palo 

Alto Networks and Emile Monette, Director of Government-wide Cyber Security, Resilience, 

and Risk at the U.S. General Services Administration (GSA) to discuss the role of third-party 

vendors and the roles of both cyber security industry partners and the federal government in 

cyber security. Mr. Shah and his colleague Jon Davis (Palo Alto Network’s Federal Chief 

Security Officer) presented on the key challenges of cyber security, controlling risk in 

infrastructure that a person does not own. Following the presentation, Director McRaith asked a 

question of Mr. Shah and Mr. Davis. Mr. Monette presented on the GSA’s risk assessment, 

focusing on cybersecurity. Mr. Kelleher, Rep. Keiser, and Mr. Bock then asked questions of Mr. 

Monette. 

Discussion of the Forms and Prevalence of Alternative Risk-Sharing Mechanisms

Next Chairman Glaser introduced Dr. John Seo, the co-founder and managing principal at 

Fermat Capital Management, and Jake Clark, a property treaty reinsurance broker with Guy 

Carpenter & Company, to discuss alternative risk-sharing mechanisms. Mr. Clark discussed the 

evolution of risk capital and the risk transfer market, concluding with how innovation in the 

business can help solve some challenges in the risk transfer space. Dr. Seo then discussed the 

role of alternative capital. Chairman Glaser, Ms. Bishop, and Mr. McGovern asked questions. 

New Business 

Prior to the Committee adjourning, Chairman Glaser raised the item of new business, certifying 

the minutes from the August 6, 2015 FACI meeting. The minutes were then certified. 

Chairman Glaser then discussed new subcommittee assignments and welcomed the new 

members of the committee. 

At 5:09 P.M., Chairman Glaser concluded the meeting.