Tag Archives: department of labor

Restaurant Employers: Beware!

Restaurant employers, beware! Restaurants are the target of a highly successful, U.S. Department of Labor Wage and Hour Division (WHD) restaurant enforcement and compliance initiative that WHD already has used to nail a multitude of restaurants across the country for “widespread violations” of Fair Labor Standards Act (FLSA) minimum wage, overtime, child labor and other wage and hour laws (WH Law).

Having reportedly found WH Law violations in “nearly every one” of the WH Law investigations conducted against restaurant employers during 2016 and recovered millions of dollars of back pay and penalties from restaurants caught through investigations conducted under its WHD Restaurant Enforcement Initiative, WHD Administrator Dr. David Weil recently confirmed WHD plans to expand the restaurant employers targeted for investigation and other efforts to punish and correct WH Law violations under the Restaurant Enforcement Initiative through 2017 in an October 5, 2016 WHD News Release: Significant Violations In The Austin Restaurant Industry Raise Concerns For Us Labor Department Officials (News Release).

The News Release quotes Administrator Weil as stating:

“The current level of noncompliance found in these investigations is not acceptable …WHD will continue to use every tool we have available to combat this issue. This includes vigorous enforcement as well as outreach to employer associations and worker advocates to ensure that Austin restaurant workers receive a fair day’s pay for a fair day’s work.”

Given the substantial back pay, interest, civil or in the case of willful violations, criminal penalties, costs of defense and prosecution and other sanctions that restaurant employers, their owners and management can face if their restaurant is caught violating FLSA or other WH Laws, restaurants and their leaders should arrange for a comprehensive review within the scope of attorney-client privilege of the adequacy and defensibility of their existing policies, practices and documentation for classifying, assigning duties, tracking regular and overtime hours, paying workers and other WH Law compliance responsibilities and opportunities to mitigate risks and liabilities from WH Law claims and investigations.

See also: Boston Furs Sued For $1M For Violations of Fair Labor Standards Act  

Many Restaurants Already Nailed Through Restaurant Enforcement Initiative

Even before the planned 2017 expansion of its Restaurant Enforcement Initiative, WHD’s enforcement record shows WHD’s efforts to find and punish restaurants that violate WH Laws are highly successful. Restaurant employers overwhelmingly are the employers targeted by WHD in the vast majority of the WH Law settlements and prosecutions announced in WHD News Releases published over the past two years, including aggregate back pay and penalty awards of more than $11.4 million recovered through the following 31 actions announced by WHD between January 1, 2016 and October 31, 2016:

 

Enforcement Actions Highlight Common Restaurant WH Law Compliance Concerns

Restaurant employers, like employers in most other industries, are subject to a host of minimum wage, overtime and other requirements including the FLSA requirement that covered, nonexempt employees earn at least the federal minimum wage of $7.25 per hour for all regular hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers also are required to maintain accurate time and payroll records and must comply with child labor, anti-retaliation and other WH Law requirements.

  • The News Release identified some of the common violations WHD uncovered in these investigations included employers:
  • Requiring employees to work exclusively for tips, with no regard to minimum-wage standards;
  • Making illegal deductions from workers’ wages for walkouts, breakages, credit card transaction fees and cash register shortages, which reduce wages below the required minimum wage;
  • Paying straight-time wages for overtime hours worked.
  • Calculating overtime incorrectly for servers based on their $2.13 per hour base rates before tips, instead of the federal minimum wage of $7.25 per hour.
  • Failing to pay proper overtime for salaried non-exempt cooks or other workers;
  • Creating illegal tip pools involving kitchen staff;
  • Failing to maintain accurate and thorough records of employees’ wages and work hours.
  • Committing significant child labor violations, such as allowing minors to operate and clean hazardous equipment, including dough mixers and meat slicers.

Use Care To Verify Tipped Employees Paid Properly

Based on the reported violations, restaurants employing tipped employees generally will want to carefully review their policies, practices and records regarding their payment of tipped employees. Among other things, these common violations reflect a widespread misunderstanding or misapplication of special rules for calculating the minimum hourly wage that a restaurant must pay an employee that qualifies as a tipped employee. While special FLSA rules for tipped employees may permit a restaurant to claim tips (not in excess of $5.12 per hour) actually received and retained by a “tipped employee,” not all workers that receive tips are necessarily covered by this special rule. For purposes of this rule, the definition of “tipped employee” only applies to an employee who customarily and regularly receives more than $30 per month in tips.

See also: Workplace Retaliation: A Major Source Of Employer Exposure  

Also, contrary to popular perception, the FLSA as construed by the WHD does not set the minimum wage for tipped employees at $2.13 per hour. On the contrary, the FLSA requirement that non-exempt workers be paid at least the minimum wage of $7.25 per hour for each regular hour worked also applies to tipped employees. When applicable, the special rule for tipped employees merely only allows an employer to claim the amount of the tips that the restaurant can prove the tipped employee actually received and retained (not in excess of $5.13 per hour) as a credit against the minimum wage of $7.25 per hour the FLSA otherwise would require the employer to pay the tipped employee. Only tips actually received by the employee may be counted in determining whether the employee is a tipped employee and in applying the tip credit. If a tipped employee earns less than $5.13 per hour in tips, the restaurant must be able to demonstrate that the combined total of the tips retained by the employee and the hourly wage otherwise paid to the tipped employee by the restaurant equaled at least the minimum wage of $7.25 per hour.

Furthermore, restaurant or other employers claiming a tip credit must keep in mind that the FLSA generally provides that tips are the property of the employee. The FLSA generally prohibits an employer from using an employee’s tips for any reason other than as a credit against its minimum wage obligation to the employee (“tip credit”) or in furtherance of a valid tip pool.

Also, whether for purposes of applying the tip credit rules or other applicable requirements of the FLSA and other wage and hour laws, restaurant employers must create and retain appropriate records and other documentation regarding worker age, classification, hours worked, tips and other compensation paid and other evidence necessary to defend their actions with respect to tipped or other employees under the FLSA and other WH Law rules. Beyond accurately and reliably capturing all of the documentation required to show proper payment in accordance with the FLSA, restaurants also should use care to appropriately document leave, discipline and other related activities as necessary to show compliance with anti-retaliation, equal pay, family and medical leave, and other mandates, as applicable. Since state law also may impose additional minimum leave, break time or other requirements, restaurants also generally will want to review their policies, practices and records to verify their ability to defend their actions under those rules as well.

Child Labor Rules Require Special Care When Employing Minors

While hiring workers under the age of 18 (minors) can help a restaurant fulfill its staffing needs while providing young workers valuable first time or other work experience, restaurants that hire minors must understand and properly comply with any restrictions on the duties, work hours or other requirements for employment of the minor imposed by federal or state child labor laws.

As a starting point, the legal requirements for employing minors generally greater, not less, than those applicable to the employment of an adult in the same position. Employers employing workers who are less than 18 years of age (minors) should not assume that the employer can pay the minor less than minimum wage or skip complying with other legal requirements that normally apply to the employment of an adult in that position by employing the minor in an “internship” or other special capacity. The same federal and state minimum wage, overtime, safety and health and nondiscrimination rules that generally apply to the employment of an adult generally will apply to its employment of a worker who is a minor.

Beyond complying with the rules for employment of adults, restaurants employing minors also must ensure that they fully comply with all applicable requirements for the employment of minors imposed under the FLSA child labor rules and applicable state law enacted to ensure that when young people work, the work is safe and does not jeopardize their health, well-being or educational opportunities. Depending on the age of the minor, the FLSA or state child labor rules may necessitate that a restaurant tailor the duties and hours of work of an employee who is a minor to avoid the substantial liability that can result when an employer violates one of these child labor rules.

The FLSA child labor rules, for instance, impose various special requirements for the employment of youth 14 to 17 years old. See here. As a starting point, the FLSA child labor rules prohibit the any worker less than 18 years of age from operating or cleaning dough mixers, meat slicers or other hazardous equipment. Depending on the age of the minor worker, the FLSA child labor rules or state child labor laws also may impose other restrictions on the duties that the restaurant can assign or allow the minor to perform. Restaurants hiring any worker that is a minor must evaluate the duties identified as hazardous “occupations” that the FLSA child labor rules prohibit a minor of that age to perform here as an “occupation” and take the necessary steps to ensure the minor is not assigned and does not perform any of those prohibited activities in the course of his employment.

In addition to ensuring that minors don’t perform prohibited duties, restaurants employing minors also comply with all applicable restrictions on the hours that the minor is permitted to work based on the age of the minor worker. For instance, the FLSA and state child labor rules typically prohibit scheduling a minor less than 16 years of age to work during school hours and restrict the hours outside school hours the minor can work based on his age. Additional restrictions on the types of jobs and hours 14- and 15-year-olds may work also may apply.

See also: What Happens When Technology and Workers’ Comp Law Collide?  

Compliance with the FLSA child labor rules is critically important for any restaurant or other employer that employs a minor, particularly since the penalties for violation of these requirements were substantially increased in 2010, as Streets Seafood Restaurant learned earlier this year.

According to a WHD News Release, Street’s Seafood Restaurant paid $14,288 in minimum wage and overtime back wages and an equal amount in liquidated damages totaling $28,577 to eight employees, and also was assessed a civil money penalty of $14,125 for FLSA child labor violations committed in the course of its employment of four minors ages 15 to 17. Specifically, investigators found Street’s Seafood Restaurant:

WHD’s announcement of the settlement resolving these child labor laws quotes Kenneth Stripling, director of the division’s Birmingham District Office as stating:

“Employing young people provides valuable experience, but that experience must never come at the expense of their safety …Additionally, employers have an obligation to pay employees what they have legally earned. All workers deserve a fair day’s pay for a fair day’s work. Unfortunately, Street’s Seafood violated not only child labor laws, but has also shorted workers’ pay. The resolution of this case sends a strong message that we will not tolerate either of those behaviors.”

Restaurants Must Act To Minimize Risks

Beyond WHD’s direct enforcement actions, WHD also is seeking to encourage private enforcement of WH Law violations by conducting an aggressive outreach to employees, their union and private plaintiff representatives, states and others. Successful plaintiffs in private actions typically recover actual back pay, double damage penalties plus attorneys’ fees and costs. The availability of these often lucrative private damages makes FLSA and other WH Law claims highly popular to disgruntled or terminated workers and their lawyers. When contemplating options to settle claims WH Law claims made by a worker, employers need to keep in mind that WHD takes the position that settlements with workers do not bar the WHD from taking action unless the WHD joins in the settlement and in fact, past settlements may provide evidence of knowingness or willfulness by the employer in the event of a WHD prosecution. The substantial private recoveries coupled with these and other WHD enforcement and other compliance actions mean bad news for restaurant employers that fail to manage their FLSA and other WH Law compliance. Restaurant employers should act within the scope of attorney-client privilege to review and verify their compliance and consult with legal counsel about other options to minimize their risk and streamline and strengthen their ability to respond to and defend against audits, investigations and litigation.

Beyond verifying the appropriateness of their timekeeping and compensation activities and documentation, restaurants and staffing or management organizations working with them also should use care to mitigate exposures that often arise from missteps or overly aggressive conduct by others providing or receiving management services or staffing services. All parties to these arrangements and their management should keep in mind that both parties participating in such arrangements bear significant risk if responsibilities are not properly performed. Both service and staffing providers and restaurants using their services should insist on carefully crafted commitments from the other party to properly classify, track hours, calculate and pay workers, keep records, and otherwise comply with WH Laws and other legal requirements. Parties to these arrangements both generally also will want to insist that these contractual reassurances are backed up with meaningful audit and indemnification rights and carefully monitor the actions of service providers rendering these services.

Ready to Comply With Fiduciary Standard?

Recent actions by the U.S. Department of Labor (DOL) are causing insurance and other financial services brokers to rethink their business models and how they communicate with their customers. That’s because the DOL recently finalized a controversial new standard broadening the definition of who constitutes a “fiduciary” under the Employee Retirement Income Security Act (ERISA).

Essentially, the rule, with an applicability date of April 10, 2017, heightens the duty of financial advisers for 401(k) plans and IRAs who are considered “brokers,” defined as registered representatives of a broker dealer paid commissions by the investments they recommend. Before the new rule, brokers were held to a standard of suitability, which meant that, when a broker recommended that a client buy or sell a particular security, the broker must have a reasonable basis for believing that the recommendation is suitable for that client. That standard allowed brokers to recommend an investment product that paid them a higher commission as long as it was suitable for the client, even though it may not be the best choice. Under the new fiduciary standard, brokers must put their clients’ interests ahead of their own in recommending investments.

See also: Do Brokers, Agents Owe Fiduciary Duty?  

The new standard for brokers puts them on par with investment advisers registered with the Securities and Exchange Commission or individual states, who were already required to meet the fiduciary standard. The change presents a challenge to the business model of brokers, who typically get paid from commissions, unlike registered investment advisers, who are paid a percentage fee based on the amount of plan assets under management.

New challenges for broker customer communications

The challenges the new rule poses for brokers don’t end with compensation. The new duty will directly affect any information brokers provide to customers in print or digital form that might be deemed a “recommendation” under the rule. A fact sheet provided by the DOL describes a “recommendation” as follows:

“A ‘recommendation’ is a communication that, based on its content, context and presentation, would reasonably be viewed as a suggestion that the advice recipient engage in or refrain from taking a particular course of action. The more individually tailored the communication is to a specific advice recipient or recipients, the more likely the communication will be viewed as a recommendation.”

A holistic view of the customer communications ecosystem

In short, every broker customer communication will now need to be audited to determine whether it constitutes a recommendation and modified if it would violate the new standard. This could be an onerous task.

Customer communications management (CCM) processes will be essential for complying with this new rule. Adding personalization to communications is a huge advantage to the adviser, but it is now critical to have a process for reviewing these personalized communications to confirm that they conform to the new legal reality.

CCM becomes even more critical considering the efficiency and control that can be gained by centrally managing this content. Scattered, decentralized communications processes will make it far more likely that an adviser will send noncompliant content to a customer, exposing the company and the adviser to considerable risk.

Many insurance agencies and other brokers use legacy systems to generate their customer communications, which makes it costly and time-intensive to modify them to ensure compliance with the new rule. IT departments have the skills to make the needed changes, but not the time or full expertise to review and audit the updated customer communications. Insurance organizations should give careful consideration to the following to identify potential obstacles to compliance:

  • Determine where customer information is stored. If it resides in multiple departmental systems, there is greater risk that advisers will send noncompliant communications to customers unless these systems are coordinated.
  • Consider whether existing CCM processes and systems are flexible enough to incorporate compliance review for today’s wide range of communications channels, including mobile, email, web pages and social media.
  • Analyze how customer activities are supported by different channels in the organization. Channel communications may be intertwined from a customer’s perspective, but managed separately within the organization. Achieving compliance will require understanding how communications appear to the customer.
  • Ensure that compliance officers and other regulatory personnel are engaged early in communications creation and automate approval processes to speed time-to-market and create audit trails.

With the new DOL rule, brokers want to know what constitutes a recommendation, and they want to know how to effectively communicate with customers in a compliant way. Ideally, insurance organizations will find strategies that allow brokers the freedom to personalize their customer communications so that they can differentiate from the competition, while at the same time receive the timely guidance they need to avoid making an unintentional recommendation.

See also: Fiduciary Liability Insurance in the Nonprofit Sector – What You Need to Know  

Accomplishing this will require a careful look at the current customer communications ecosystem and taking the necessary steps to ensure that compliance review is integrated into workflows in the most effective, yet least intrusive, way.

Global Insurance CRO Survey 2016

Risk functions have evolved from “check-the-box” compliance to being a key enabler for business decision-making. This change has provided chief risk officers (CROs) with a seat at the table in the highest levels of the organization.

2016 has been a year of black swans, characterized by prolonged low interest rates, political uncertainty in key markets and increasing competitive forces challenging insurers’ business models. Together with the rise of risk-based capital regimes across the globe, these factors are tending to align the CRO and CFO agendas, establishing a tighter link between risk, capital and value.

The CRO role will always have a strong regulatory-driven rationale. But as the role evolves, we see an opportunity in ERM to take stock of teams, toolkits and processes — and use them to achieve greater effectiveness.

See also: The Myth About Contractors and Risk  

This shift is occurring at different rates in different regions, but the direction is clear. Our survey explores five key themes around the risk function and CRO role:

1. There has been a high degree of operationalization in prudential regulation around the globe:

  • In Europe, in response to Solvency II demands
  • In the U.S., as a consequence of the NAIC’s ORSA requirement and for the larger insurers, SIFI demands from the Federal Reserve Board
  • In Asia-Pacific, with the implementation of risk-based capital regimes (e.g. C-ROSS in China, LAGIC in Australia, ORSA requirements in Singapore and ICAAP in Malaysia)

2. We are seeing a sharper focus on consumer-conduct regulation:

  • The U.S. Department of Labor is shaking up focus on the advice model.
  • The European Parliament is debating significant advances in policyholder communications, and various European home regulators are demanding redress for past failings in sales process, transparency of charges and continuing product suitability.
  • Depending on the region, it is more or less common for CROs to have compliance report through to them.

3. Governance models are now largely converging to reflect the three lines of defense principles.

Although differences exist across geographies, CROs are consistently seeking to strengthen risk accountability and understanding across the workforce. In particular, while we are seeing an increased awareness that risk ownership starts with the first line, there still are opportunities to strengthen risk accountability and improve communication to help everyone understand risk appetite and consequences.

4. Risk functions are becoming more involved in producing and monitoring risk metrics.

Larger insurers subject to Solvency II and now required to obtain approval of their internal economic capital models are partly behind this shift in risk functions.

Beyond Europe, other jurisdictions have a variety of approaches. For example, U.S. insurers subject to Federal Reserve regulation are required to use more extensive stress and scenario testing in their internal capital management processes (with the eventual requirement to publicly disclose the results).

See also: Minority-Contracting Compliance — Three Risks  

In general, even where there is no regulatory mandate, CROs and their risk teams are increasingly involved with stress testing and more advanced financial models to quantify risk.

5. CROs are aware of the potential for improvement in operational risk management.

While businesses generally understand the “known knowns,” risk plays an important role in emphasizing the need for a systematic approach to the full spectrum of exposures. Cyber risk in particular is one of the biggest areas of concern for most CROs, who consider it a key focus area of operational risk.

Download the full North American report here.

Download the full EMEIA report here.

Insurance Disruption? Evolution Is Better

A significant part of the insurance industry and consumers have forgotten, for the most part, about why the industry exists. The policy holder pays into a pool through the insurance company and, if a certain event occurs, expects a claim to be paid. Very simple, right? So how has the insurance industry strayed so far from this simplest of concepts? And how have so many consumers purchased insurance products that have added so many complex layers to basic risk protection?

Yes, it is time for change in the insurance industry. Change is a part of life. And change is coming. The insurance industry needs to adapt to the current technological environment. At the same time, insurance consumers need to take advantage of all of the information available to them and increase their insurance literacy. Almost every single person in the U.S. has some form of insurance, but very few people have more than a general idea of what each of their insurance policies is and what it covers.

See also: Which to Choose: Innovation, Disruption?  

There is a constant buzz in the insurance industry about “disruption.” Why disruption? Is it because the term is trendy and has happened in other industries, or is it because disruption is actually needed in the insurance industry?

Is it more appropriate to say that the insurance industry needs to evolve, similar to how the investment world has already started to evolve?

Let’s look at the words themselves for the necessary direction, which will show why so many high-tech firms have failed in the insurance space and will continue to fail:

Disrupt: to cause disorder or turmoil in; to break apart; to radically change (an industry, business strategy, etc.), as by introducing a new product or service that creates a new market.

Evolve: to develop gradually or to gradually change one’s opinions or beliefs.

(Definitions are from dictionary.com.)

High-tech firms are focused on changing insurance like they have other industries, and it’s not going to work the same because they are focused on disruption rather than evolution. The insurance industry is one of the oldest industries in the world, with the concept tracing back centuries. Insurance is also a highly regulated industry. So just as it’s really difficult for a huge oil tanker to change course, it is equally challenging for an industry with the size and history of the insurance industry to change course or be subject to disruption. A slow evolution is what makes sense for the insurance industry.

The investment industry has evolved in many ways, and the technology firms that are entering the investment world are not focused primarily on disrupting the industry; rather, they are focused on more effective ways to provide advice, manage investments and gain greater efficiency.

The investment world is already further along than the insurance industry because there is already a fiduciary standard, with a greater expectation that the investment industry act in the best interest of their clients. Partially, this is because most investment advisers are compensated through some sort of fee arrangement rather than a commission.

The insurance industry has not changed in many ways and is just starting to adapt to our mobile society, new technologies, “big data” analytics and blockchain technology, among other factors. Currently, changes have been mostly limited to basic tasks like claims processing and some distribution activities. But really, most of the high-tech firms are still just selling insurance, rather than changing insurance. What is really needed is a change in the overall thought-process, including underwriting, policy servicing and home office operations.

Consumers expect and deserve more transparency, more efficient processes and more accurate results. When the insurance industry can deliver these, everyone will benefit. Insurance consumers also deserve advice that will help them best meet their insurance needs. Which is why The Insurance Bill of Rights was created.
What is really needed is to find a way to deliver insurance to the consumer in a way that makes the process more seamless, with optimized pricing for insurance products. Helping consumers become more insurance-literate and manage their insurance portfolio is where technology can help.
Compensation is a part of this and why I’ve written in the past regarding how the Department of Labor fiduciary rule will have a major impact long term on all insurance products, in addition to the ones it addresses inside qualified retirement plans. Major financial service firms such as Merrill Lynch are no longer offering commission-based products inside their retirement plans. While commissions in and of themselves are not necessarily bad, they can lead to market conduct issues and can increase unnecessary replacement of insurance products (and lead to churning of investment products).
Optimized insurance products and pricing are what will ultimately be of benefit to all. Consumers will be able to access insurance products that fit their needs and are priced more closely to their risk profile. Insurance companies will benefit from being able to have better data, which will help with their ability to price insurance products more efficiently. Insurance companies have had issues in pricing different types of insurance products, including long-term care insurance and life insurance. Technology and better use of data will help.
And where does that leave insurance agents? Insurance agents will still be necessary, as are investment advisers. Perhaps someday artificial intelligence will be able to replace a human, but that day is still not near. Consumers can benefit from the experience of a professional, dedicated insurance agent just as they can from the experience of other trained professionals. If Turbo Tax has not eliminated every tax preparer, then why would it be expected that insurance agents will be replaced by an automated process?

As Bob Dylan once sang, “The Time’s They Are A’Changin,'” and the next few years will bring a long-needed evolution rather than a disruption to the insurance industry.

If you would like to be a part of this positive change, please support the Insurance Bill of Rights and sign the petition at Change.org (here). If you are a member of the insurance industry, take The Insurance Bill of Rights Pledge. Let me know your thoughts.

What Will Trump Mean for State Regulation?

Insurance is regulated by states, and the states’ laws are implemented and administered by state insurance commissioners. This was affirmed in 1945 by the McCarran-Ferguson Act. Under that act, states regulate the business of insurance unless the U.S. Congress decides otherwise. In the past six years, the federal government has with regularity encroached on areas previously controlled solely by state insurance commissioners, such as through the following federal actions:

  • The creation by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) of the Federal Insurance Office (FIO)
  • Dodd-Frank’s creation of the Financial Stability Oversight Council (FSOC)
  • The Affordable Care Act (ACA)
  • The Department of Labor (DOL) fiduciary rule issued April 8, 2016

These federal encroachments have led to regulatory confusion. Although state insurance commissioners are the predominant regulator of licensed insurance carriers and producers, insurance companies that are deemed systemically important non-bank financial institutions are supervised both by the Federal Reserve and by their domestic state insurance regulators. This creates significant duplication and regulatory burden; the cost of that burden – as well as some of the confusion — is ultimately passed on to consumers. Under the ACA, for instance, state insurance regulators routinely must react to hundreds of pages of regulations that are published by the Centers for Medicare and Medicaid Services. Licensed insurance producers and carriers must overhaul their operations and distribution to comply with the 1,023-page DOL fiduciary rule.

See also: What Trump Means for Business  

As I see it, state legislatures have given state insurance regulators dual mandates: (1) to protect consumers from the moment of purchase through filing a claim and ultimately the payment or denial of that claim; and (2) to ensure companies are solvent and can meet their financial obligations to consumers. While insurance regulators at the state level can always improve, I do believe that collectively we do a commendable job. Insurance company failures are rare, and most states respond to consumer complaints in a very timely fashion.

Under a President Trump, I believe the role of state insurance regulators will grow as some federal regulations are eliminated. If Dodd-Frank is reviewed, the role of the FIO and even the FSOC could change. State regulators have argued tirelessly that the FIO is not a regulator and needs to stay in its lane as authorized under Dodd-Frank. State regulators are debating with the FIO the need for a covered agreement on reinsurance collateral and are worried about state law being preempted. I think that, under a Trump administration, state regulators may be listened to much more in this debate. State commissioners and the FSOC representatives with insurance experience have also worked to ensure that the FSOC recognize that insurance is not banking and that traditional insurance is not systemic to the global financial system. A Trump administration may agree with state insurance regulators on these issues and many more. Only time will tell, of course.

State insurance commissioners need to demonstrate through the execution of states’ dual mandates that we deserve the responsibility of supervising the insurance markets in our respective states and that we do it better than it could be done from the federal level. I believe the time for state insurance commissioners to shine is now, and I hope we all continue to deliver results as our roles as the regulators of insurance carriers and producers and as the protectors of consumers become increasingly important.

See also: What Trump Means for Workplace Wellness