House and Senate members have agreed to add a state insurance commissioner to a federal systemic risk council as a nonvoting member, a win for the National Association of Insurance Commissioners (NAIC). “We felt it was important that if you’re going to be dealing with all financial sectors that there be an insurance regulator – someone with the background and knowledge,” said West Virginia Insurance Commissioner and NAIC President Jane L. Cline. The NAIC recently wrote a letter to lawmakers saying the council “demands the input, expertise, and information resources of an active insurance regulator.” Meanwhile, the House and Senate are still at odds over a resolution fund that would be used to unwind failed insurers. “We believe that the insurers should be carved out of the resolution authority,” Cline said. “We already have processes in place that allow for the unwinding of an insurance company.”

But the National Association of Mutual Insurance Companies is against putting an insurance voice on the council, wanting to avoid any association between the industry and systemic risk regulation. “It creates sort of the implicit mandate to find a reason to sort of bring an insurance company into that,” said Matt Brady, a NAMIC spokesman. “At some point, somebody’s going to have to ask why they are there.”

Congress Negotiators Favor State Regulator on Council (BestWire 6/18/10)

June 22, 2010