The US insurance industry has welcomed the fulfilment of an Obama Administration-backed pledge to establish a federal regulatory body.

A number of leading insurance associations wrote last week to Treasury Secretary Timothy Geithner applauding the establishment of the Federal Insurance Office (FIO).

A federal-level office was first mooted after the meltdown of the financial markets in 2007 and 2008 and the failure of insurance giant AIG.

The new body will be housed under the Treasury Department as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and will monitor and co-ordinate US Government policy.

“Over the past several months, we have advocated on Capitol Hill and in the Executive Branch for a strong FIO,” the letter to Mr Geithner says.  

“We believe there is an important role for the Federal Government with regard to insurance and reinsurance.”

The trade groups listed a number of issues to be considered, including that the FIO’s director must “have the experience and stature necessary to represent the US internationally”.

The letter also stressed the FIO should ensure equitable treatment for domestic and foreign insurers and reinsurers, and promote job creation and foster innovation.