When the sweeping Wall Street Reform Act known as Dodd-Frank was signed into law by President Obama in 2010, the goal was to avoid another economic and credit crisis like the one that stymied the global economy two years earlier. The bill was demonized by virtually every sector of the financial services industry as an unconstitutional overreach of federal powers.

The law consolidated regulatory agencies, created a systemic risk oversight council, increased transparency of derivatives, created a consumer financial protection agency, and gave powerful tools to federal regulators to “unwind” bankrupt firms deemed “too big to fail.”

The insurance industry was largely left unscathed, at least compared to its Gramm-Leach-Bliley brethren, but a relatively small section of Dodd-Frank will forever change the dynamics of insurance regulation. Subtitle A of Title V created the Federal Insurance Office (FIO) within the Department of Treasury. Former Illinois Insurance Director Mike McRaith now leads the office. The FIO’s domestic regulatory authority does not exist, so it avoids regulatory arbitrage.

The office, though, does trump state regulators in one space that is quickly growing in scope and consequence, and that’s in the arena of global coordination of insurance regulations. Two years after the office opened its doors, it’s worth noting the velocity at which the office is running with international regulatory bodies and the consequences of major deals the office is brokering with insurance supervisors abroad.

Remember when we used to gossip about the NAIC?

McRaith is determined to make the FIO’s early years transformational, but international insurance companies, state regulators and members of Congress are watching his every move. And rightly so, because the activity among global regulatory bodies is exploding.

The International Association of Insurance Supervisors (IAIS) is moving ahead with recommendations for regulators known as Insurance Core Principals, who make recommendations on regulating all aspects of the insurance business. And the Group of 20 has made the IAIS recommendations key factors when groups like the International Monetary Fund and the World Bank consider international financial assistance. Given the economic turmoil across the globe, that’s a pretty big carrot for young regulators in emerging markets that the industry considers ripe for new business.

The Insurance Core Principals were approved by the IAIS, and the industry was closely involved with their consideration. But they were just the beginning of what looks to be a burst of international regulatory activity that could become the new normal.

The IAIS is moving to develop a Common Framework of regulations targeting Internationally Active Insurance Groups. When complete, the regulations, known as ComFrame, could apply new group supervision and regulatory standards to the IAIG. These discussions have the Internationally Active Insurance Groups ready for combat. They’re afraid that any group supervision over their business will, ironically, result in regulatory arbitrage on a global scale, implementing solvency standards that conflict with U.S. state policies and potentially limiting their ability to compete with companies not considered an IAIG.

This puts the Federal Insurance Office in a tight spot as it maneuvers the U.S. in ComFrame negotiations. The IAIS is moving quickly with the talks, and the FIO is committed to being a partner on the negotiations. But McRaith is struggling to find common ground with U.S. IAIGs. So much so that the new chairman of the House Financial Services Committee’s Housing and Insurance Subcommittee, Randy Neugebauer, R-Texas, was rallied to write McRaith, saying that an IAIS ComFrame agreement would bring an “onerous group-wide capital assessment process and result in increased costs that would put the American insurance industry at a competitive disadvantage in foreign markets, create disincentives for job creation in the U.S., and act as trade barriers in already protectionist-minded foreign jurisdictions.”

Threading the needle on these issues and ratcheting back ComFrame is a heavy lift for the FIO. But that’s just the beginning. The IAIS is also in the process of recommending to the Financial Stability Board (created by the G-20 to coordinate international financial regulation) that certain U.S. insurance companies should be deemed Global Systemically Important Insurers, essentially making them ripe targets for dual regulation. McRaith was sharply warned by Chairman Neugebauer not to endorse any such moves. He urged the FIO not to support a “rush to judgment in order to meet an arbitrary deadline,” and he pushed McRaith to work collectively with other U.S. representatives to reject the IAIS recommendation.

These moves are remnants of AIG’s global collapse and the reputational impact that its collapse had on the industry. Insurers are struggling to clarify to regulators that it was not the insurance-related lines of business that led to the collapse, and they are looking to McRaith to make this case to his international counterparts, as is Neugebauer.

But global activity doesn’t stop there. Following actions by the IAIS and the Financial Stability Board, the G20 added to the list of international regulatory bodies another group, called the Financial Consumer Protection Network, with the sole focus of protecting consumers. The network is tasked by the G20 and the Organization for Economic Co-operation and Development to come up with recommendations to be integrated into the regulatory framework promoting financial education, awareness and competition. It seems as though the G20 is tripping over itself in creating new regulatory bodies.

All this activity is inadvertently creating a strong, resourceful and consequential Federal Insurance Office. The irony, of course, is that the office was designed to be defanged when it was written into Dodd-Frank. But McRaith has made it clear that he’s aware of the demands and the opportunity to build the office’s integrity. And as he adroitly maneuvers the U.S. government in these negotiations abroad, we’ll all be watching, waiting and thinking: “Remember when we used to gossip about the NAIC?”