By Emily Stephenson
WASHINGTON (Reuters) - The U.S. Federal Reserve has hired a former state insurance commissioner to help it oversee non-bank financial firms that a council of regulators identified for tougher scrutiny last year.
Thomas Sullivan, who led the Connecticut Insurance Department from 2007 through 2010 and later worked at PricewaterhouseCoopers, starts as a senior adviser on June 9.
Sullivan will help fill a critical expertise gap at the Fed, which has more experience regulating Wall Street banks and less of a track record with major insurers and other non-bank financial firms.
"I'm excited and anxious to start next Monday," Sullivan said.
The Fed received authority to regulate insurers PRUDENTIAL (PRU.LO)Financial and American International Group in 2013 after a group of regulators known as the Financial Stability Oversight Council decided those firms were so big their failure would destabilize financial markets.
During the 2007-2009 financial crisis, the U.S. government stepped in to stabilize AIG with a taxpayer-funded bailout that eventually topped $180 billion.
General Electric's finance arm also was dubbed "systemically important."
Insurance companies and their backers in the U.S. Congress have complained about the Fed's lack of direct experience with insurers and said the Fed should not seek to impose bank-like restrictions on them.
Fed Chair Janet Yellen told lawmakers earlier this year that the Fed recognized that banks and insurance companies differ in some ways and was working to craft capital rules that would reflect those differences.
Sullivan, who was active in the National Association of Insurance Commissioners, according to a biography on Connecticut's insurance department website, said he would be part of the Fed's Division of Banking Supervision and Regulation.
A Fed spokesman did not immediately respond to a request for comment.
(Reporting by Emily Stephenson; Editing by Karey Van Hall and Bill Trott)
