Federal Treasurer Peter Costello has appointed former Treasury executive Gary Potts as a Commissioner on the Productivity Commission.

In 2004 Mr Potts, a former Deputy Secretary to the Treasury, conducted a comprehensive review into the use of direct offshore foreign insurers (DOFIs) in the Australian insurance market.

His recommendations on ways DOFIs should be regulated have still not been acted on by his old colleagues at Treasury, whose preferred course of action – a complex and seemingly unworkable formula involving the monitoring of foreign jurisdictions – has failed to find support.

Legislation to control DOFIs is still being awaited by the industry, but the word from Canberra is that the industry shouldn’t hold its breath.

Mr Potts, a former part-time associate commissioner to the Productivity Commission, has been appointed on a part-time basis for three years.