Treasury’s Federal Insurance Office Releases Annual Report on the Insurance Industry and Request for Information on Potential Federal Insurance Response to Catastrophic Cyber Incidents

F.P. Report

WASHINGTON: The U.S. Department of the Treasury’s Federal Insurance Office (FIO) last week released its Annual Report on the Insurance Industry.  Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), FIO must report annually to the President and Congress on the state of the insurance industry and any other information deemed relevant or requested.  The FIO Annual Report discusses the U.S. insurance industry’s financial performance and its financial condition for the year ending December 31, 2021, and then provides a domestic outlook for the industry for 2022.  The FIO Annual Report also summarizes FIO’s activities over the past year and addresses selected matters affecting the domestic and international insurance industry.

In addition, on September 29, FIO issued a request for information in the Federal Register to solicit public comments on a potential federal insurance response to catastrophic cyber incidents.  The comments will inform FIO’s work in responding to a recommendation by the U.S. Government Accountability Office that FIO and the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency jointly assess the extent to which the risks to U.S. critical infrastructure from catastrophic cyberattacks warrant a federal insurance response.  FIO is also coordinating with the Office of the National Cyber Director on this project.

“The Federal Insurance Office’s annual report is an important analysis of the U.S. insurance markets and related issues that may impact financial stability,” U.S. Assistant Secretary for the Treasury for Financial Institutions Graham Steele said.  “Consistent with the U.S. Government Accountability Office’s recommendation, we look forward to receiving stakeholder input from this request for information on a potential federal insurance response to catastrophic cyber incidents.”

Cyber insurance also was a key topic in FIO’s most recent report on the effectiveness of the Terrorism Risk Insurance Program (TRIP), released in June.  That report evaluates the expanded cyber insurance data collected pursuant to the 2022 changes to the annual TRIP data call.  The new, more detailed information concerning cyber insurance coverage written by insurers that are subject to TRIP will help FIO better evaluate the program’s response to cyber-related incidents that may have implications for program effectiveness and FIO’s administration of TRIP.