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NAIC Leader Says FSB Workings Akin to “Shadow Regulation”

National Association of Insurance Commissioners (NAIC) Vice President Michael Consedine told reporters that by excluding state insurance regulators from crucial discussions at the Financial Stability Board (FSB), the influential global body would be engaged in a form of “shadow regulation...”
May 14, 2014

National Association of Insurance Commissioners (NAIC) Vice President Michael Consedine told reporters that by excluding state insurance regulators from crucial discussions at the Financial Stability Board (FSB), the influential global body would be engaged in a form of “shadow regulation.” Consedine, who is also Pennsylvania’s insurance commissioner and chairman of the NAIC’s international insurance relations committee, briefed reporters last week after a round of meetings with members of Congress.

State insurance commissioners have been pushing for representation on the FSB, as the group works to develop global capital standards for internationally-active insurance companies. NAIC President Adam Hamm asked U.S. financial regulators in March to make a push for state insurance commissioners to join discussions at the global watchdog that relate to insurance. Hamm said that problems were developing because of the lack of state participation, but that federal regulators have yet to respond to his letter. “The lack of state regulators’ … expertise is starting to negatively influence the work product coming out of the Financial Stability Board, to the detriment of the American insurance industry,” said Hamm.

Meanwhile, Rep. Randy Neugebauer (R-Texas), a member of the House Financial Services Committee, is gathering signatures for a letter that says the Federal Reserve and the Federal Insurance Office (FIO) have overstepped their authorities in discussions at the FSB and the International Association of Insurance Supervisors (IAIS), and are trying to “usurp authority from state insurance regulators.”

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